March 21, 2018
Many people wonder if usury (Riba) is only when the payment is postponed. True or false?
1) It is well known that conventional bank are not allowed to buy and sell goods, and that prohibition is by the law. The allowed functions of the conventional banks are lending and borrowing. Financing through conventional banks is considered borrowing, and any benefit generated from lending money is prohibited by the Islamic jurisdiction (Shariah). 2) Usury (Riba) which is prohibited by Islamic Shariah, was practiced in the early years before Islam and did not only include the postponing of payments, it has also included the benefits generated from lending the principal amount even when payments are settled on maturity.