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what is RIBA or SOOD?,

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   ZERO-00
Monday, November 3, 2008 01:40 PM 
Reply: >
salam,

different islamic scolars have different reply

some says prize bonds are not haram

some says changing profit schemes is ok

some says national schemes are good

my question is that where one go in pakistan??

***when one get ZERO pay after 15th of a month,
***or one is old having no enough income,
***or one has to pay more bills than his income
***or one has to marry or educate his children

every one says haram or hilal but no one give the real story or solution?

is property investment is ok ?or what are the option left in pakistan to earn HILAL

as lot of wise people on this site may solve my problem as i am really fed up with multiple and differnts answers of islamic scolars

summary

***how to eat when one is old in pak

***how to pay govt bill and live atleast below poverty level with proud?

thanks
arsu replied on Monday, November 3, 2008 02:11 PM 

Zero bi,first of all be clear about one thing, if you truly follow the teachings of Islam as dictated by Quran and Sunnah, there will always be "khair" and "barakah" insha Allah.Talking about "giving and taking interest",it is srtrictly forbidden.So try maximum to stay away from it, and you will see whatever sustenance Allah has ordained for you, you will get it in imperceptible ways.
Real Money replied on Monday, November 3, 2008 02:44 PM 

Dear Zero you are not Zero but Hero

There may be many definitions for Riba but most simple to understand and valid for 99% practical purpose is.

Rent charged on money is Riba or Sood.

You have one crore Rupees, you charge or get rent on your money that is Riba and Sood but with same money you purchase a building and rent it out, now this money is not Riba or sood.

You will find many muslims confused in this regard trying to prove many shapes of raba as "allowed"
On the other hand you can find many non muslims also who will claim that the root cause of the present financial crises is Riba and Islamic system is the cure.

The Capitalism (American or interest base system)
makes the follow of money
Frome poor to rich
In Communism or Socialism money goes
from the
People to government
In Islamic system money goes from
Riche to poor

Please keep in mind that Riba is in no way cure to any problem. It is it self the biggest problem

It may not compensate the inflation it self.

Just make a wise investment and you may generate about 5% monthly income.

Good luck with your investment
just curious replied on Monday, November 3, 2008 06:25 PM 

Dear Real Money,

It would benefit all the readers of this forum if you could mention some investments giving 5% monthly income ...
overseas wisher replied on Monday, November 3, 2008 07:00 PM 

The reason Sood was forbidden because those days had unrealistic high interest rates and borrower were not able to pay back their payment and then end up being slaves,that's the reason it was forbidden but there days it's totally different.In Europe and in America,90% of the houses are on mortgages because no body has that much cash to pay so that means that you can't have a house or you just keep living on rent,i don't think so that make sense.
Jameel replied on Monday, November 3, 2008 08:28 PM 

It is debateable Topic,
Corporate interest/ state bank interest decreases inflation, helps poor widows orphans etc by decreasing inflation, and getting fixed income to fulfill their needs, when interest rate is hight two type of prople are benefited,
1. The people who have savings but dont want to take risk.
2. Reltively inactive people of society who cant work or Compete liker widows, Old people, pensioners and People who need fixed income.

On the other hand high interest has many negative effects as well, it slows the business, it decreases the Jobs, it decreases the sale.
On country level it decreases the imports and might help Copuntry to decrease Trade deficit.
In modern economy it is used as Brake and accerlator of Car Of Economy there is no other better tool than it, Other tool is Currency Value Manipulation.
The peple who are confusing it with Riba are like those who might be Confusing Alcohol and Vinegar [both are products of fermentation and distilled but actually are entirely different things]
On the other hand Credit card Loans have some resemblence with Riba as they use maketing trick to faciitate you for more spending and Trap you for very high interest rate.
eh replied on Tuesday, November 4, 2008 01:55 AM 

Islam and its teachings are forever. But the world and the society is changing everyday. People were honest, now they are not. Example can anyone tell me a person whom I can give 1 million Rs for some time and he will return it on demand without execuse? Old times currency was not used but the exchange of goods was done which almost remain the same. Since the use of currency/money is increased its price is swinging all the time and so many factors are associated to it. One of these factor is inflation, so with the rise in inflation the value of the money is diminishing while it is kept at home or interest free account.

Is it not the right of anyone to maintain the value of his money he save with his sweat and blood?

Everybody would say so and so (Halal/Haram), but can anybody give a solution about it? Everything we eat is stored with the banks money, everything is made with the finances by the banks. Ulemas should sit on together and find a solution. Shame on us we are still talking on this issue since 1400 years. The people like Maulana Fazl-urrehman who claim to be the sole authority on islam (Mufti) can't be trusted anymore, as what we have seen their character in dealing with Pervez Musharraf.
alpha replied on Tuesday, November 4, 2008 02:13 AM 

Dear Zero Sahab
AoA.
The two questions you posed are very pertinent in rich western economies as well. The baby boomers in the US will not be able to meet their fiscal obligations as they get old. Higher yield fixed income securities are also risky as seen in the current financial meltdown.

In the Sunnah of our beloved Prophet (PBUH), we learn, that one has to live within ones means, save, give charity, earn an honest living, work hard, lead a simple life, be large hearted, raise pious children and submit to Allah SWT for ones worries.

Financial markets (including real estate) have been becoming more volatile, which lure speculative investing behaviour. Please invest wisely with fundamental value analysis, and diversify as much as possible. Since you are working abroad, so you are hedging against Rupee devaluation risk.

Just to correct Real Money Sahab, Islam ordains 2.5% of wealth for Zakat. However in the American tax system, atleast 31% of the Income Tax collected goes to the poor, elderly and disabled. Even if one in the lowest tax bracket of 10% marginal tax rate, this amounts to 3.1% of income going to the poor. So essentially, in the American System more wealth is redistributed to the needy then the Islamic System.
Regards

References:
http://www.fcnl.org/pdfs/taxday07.pdf
http://en.wikipedia.org/wiki/Income_tax_in_the_United_States
AM replied on Tuesday, November 4, 2008 04:30 AM 

Assalam-u-Alaikum wr wb:

I am not an alim or sheikh but this is my understanding what I know from Islamic perspective regarding RIBA/SOOD.

"Variation of charges on any given amount becomes sood over time period".

Making profit in Islam is not HARAAM as long as the amount fixed at the begining of the deal does not change with time period.

This is RIBA -
You go to bank, get some loan for 1 year, let's say interest rate is 10%. If you pay this amount earlier then you pay less, and if you pay within one year than you pay more. If you delay payments then you end up paying more.

This is not RIBA -
You buy motor cycle, it is 30K Rupees. You want it in installments, they give you for 35K Ruppees but it is fixed. You pay this amount a year over installments. This amount does not change with time i,e if you pay earlier, then it still be 35K as when you purchased the amount on this Bike was fixed. If you pay taking a year, then it should not change from 35K.

So taking profit on commodities is not RIBA as long as that does not vary over time period.

I hope you this makes sense.



This is NOT RIBA -
Any profit on commoditiy, that is fixed
Pardesi, Jeddah replied on Tuesday, November 4, 2008 08:18 AM 

Dear Brothers

The confusion starts from mixing up these questions:
What is Riba?
Why is it Haram?
How to Avoid Riba?

Our tragedy is to get-mixed to find answers of these questions. Some people see it from practical viewpoint while others only from Islamic perspective. Iqbal said once: “Aye Musalman! Apne dil se pooch Mulla se na pooch” (Mulla, not scholars). In addition to this, some people try to confuse every thing intentionally so that the recipient himself raises questions on the practical application & its implications and become cynical to all scholars. The recipient then tries to find the answer of the third question from these scholars while the first two should be enquired but the third one to be inferred by himself in the light of the first two according to his own situation.

In response to this I like the following quote from my earlier posts ref. 40011 & 40027
“Prudential formulas can be exchanged based on certain facts & figures and posing the bitter realities prevailing but none of these can make up ideology of a Haram (Riba) as Halal. That can only happen if a person has installed another mind in place of his heart; using minds in place of heart can resolve the equation….. Even if it does not sound appealing to you please do not SELL your ideas to others who might not know the facts of the teachings of Quran & Sunnah & may fell in the ditch of Hellfire by only applying his minds to a situation which does require his heart & soul to be in command….. The inflation is a reality, while interest is Haram by all means. The resolution of the problem is to avoid Haram. This may create short-run problems BUT for those who think life beyond the boundaries of death remain calm & submit themselves to the Will of Allah.”

Quran has labeled the the person as an insane stricken by the devil when he says, "Business & interest are the same". Ayat 275-279 of Surah al-Baqarah give us guidelines.

I would invite everyone to judge each situation as Riba or business as per following guidelines:

. None else but Allah is The Creator & The Caretaker so He guides us what is suitable & what is harmful for us; whether we understand it or not. His Commandments are benevolent & mercy for the mankind. (Tauheed)
. The most loved one of Allah (Our Prophet Mohammed SAW) has been through practical difficulties of life - only to set example for us. (Risalat)
. Each one of us is responsible & accountable in Hereafter for his/her own acts. (Akhirat)
. Business involves a commodity (goods or services); money is not a commodity.
. Time has impact on the value of money, thus value of money can be maintained through circulation of money in business (Halal) or by interest (Haram).
. Interest based incomes reduces opportunities, employment, urge for hard-work while it increases greed, hatred, redundancy.

ps. Pleased to share the following mailing address. They can also be contacted at MSN if you add the same address to your messenger list.



BTW Mr. Zero congratulations on the co-existance of starting of this thread by the lucky number of 40786 "786".
Qasim replied on Tuesday, November 4, 2008 12:51 PM 

Visit this site on islamic finance and other important issues
www.brasstacks.pk
ZERO-00 replied on Tuesday, November 4, 2008 01:42 PM 

very thanks for all brothers for their valuable comments

but practical questions summarized at the end are still un answered

GOOD
Silent Spectator replied on Tuesday, November 4, 2008 02:03 PM 

In the modern economy, when every thing revolves around money/currency (no barter system), everyone who wants to use money of someone else will have to pay return on it, whether you call it riba, sood, interest, mark-up, profit etc., because the value of money/currency decreases over a period of time. If one lends Rs. 100/- payable after one year, value of this amount after one year, will not be the same. Same quantity of goods cannot be purchased with that amount. I remember a farmer who took loan from a Bank for purchase of certain number of fertilizer bags, went to the court that the Bank is charging interest and that the same being haram, court may order the bank to demand only the actual money. The Bank argued in the court that we gave this farmer certain number of fertilizer bags, and that he may pay his loan in the shape of same number of fertilizer bags. The court asked farmer for his reply. He calculated and after seeing that if he pays back in the shape of fertilizer bags, it will cost him more, as compared to what the Bank was demanding back after adding mark-up etc. So he surrendered and agreed to pay the amount as demanded by the Bank. So in the modern age, it will not be possible to run the economy without the element of return or mark-up on money.
Abrar replied on Tuesday, November 4, 2008 03:54 PM 

It could be wrong but I share my opinion. Please consult a religious scholar.

Due to past neglect, it has become a very complex issue. No doubt that Riba or Sood is "haram". In my opinion it has two dimensions, i.e., "state" and "citizen". In an Islamic society, it is a responsibility of the state to provide an interest free environment to its citizens. This will include business environment as well as taking care of dependent segment of population i.e., very old, disabled and widows which may otherwise be pushed to adopt prohibited practices in order to stay alive. If the state fails to do that and the economy is interest based then at an individual level we should try our best to stay away from it. I will compare it with Islamic dietary law where an individual can only consume "haram" in a life-threatening situation but in a very small quantity and at the same time without developing any desire for it. If a person whose survival is at stake and that person belongs to this dependent segment of population, i.e., very old, disabled or widow and interest is the only option between surviving and begging or engaging in other criminal activities or falling prey to thugs around then that person can invest in an interest based programs such as national savings. However, that person should keep in mind that he/she is doing it in order to stay alive, he/she should keep his/her earnings minimum to only food and shelter, should not adopt a lavish lifestyle (takabbur) which may persuade others to follow. That person should seek God’s forgiveness, should pray for other means of survival and should discontinue it once available.

The same principle will apply on buying homes, especially in non-Islamic countries. One must take into consideration the requirements of his/her family. If mortgage based programs are the only option available to provide shelter then one may use it. However, one must honestly investigate the option of renting or saving enough to purchase a home with a lump sum payment. If all the options are available then mortgage-based program should only be used if others will expose to extreme hardship and compromise the welfare of entire family. A large segment of even native population in those countries live on rent. Buying a small home with lump sum payment may delay ownership but may also save from foreclosure and many other worries and in my opinion, most desirable and in many cases a workable option.

An individual should make all efforts to stay away from Riba or Sood and should contribute in efforts of an interest free system. How sincere are the efforts?..... only that person and God Almighty will know. We should keep this in mind that we may cheat each others but we cannot cheat God Almighty. God Almighty has promised a day of judgment and this promise will be fulfilled.
Habib replied on Wednesday, November 5, 2008 04:21 AM 

I dont wnat to Jump in discussion but I would share an interesting aspect, We dont take into account the element of Exploitation or Zulam and we want to be Likeer kay Fakeer,
When i go to Pakistan I see many of my poor relatives struggling, I give them loan and tell them you have to return it any time later. But honestly they are almost never be able to pay back, And if I force them to pay it will be sheer injustice. May be as per some Islamic Scholor I have "right" To take back that money as they are Sahibe Nisab or So So , But I am sure the God will never forgive me if I do So. [here I am talking only of capital]
Only "Personal judgement" in light of Islamic teaching can guide us what is Riba and what is not riba.
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