A Contextual Analysis of Riba under the Framework of Exchange

Shahid Sultan
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Shahid Sultan: Attock Construction & Finishing Services

No p6aw7, SocArXiv from Center for Open Science

Abstract: Riba is not only one of the most debated terms in modern literature about Islamic economic systems but is also the most misunderstood one. The understanding provided by the majority of modern scholars differs from the one provided in the era preceding the colonial age. Riba al Nasi’ah or Nasa’a that is a primary type of riba has been grossly misunderstood as interest. This not only resulted in confusion among scholars and students alike but also in a multibillion-dollar Islamic financial industry that is mired with suspicion and increasingly visible convergence with traditional finance. Riba al Nasa’a exists and invalidates certain kind of transactions from an Islamic perspective with or without the presence of a condition of payment of any kind of interest. The only form of exchange that is acceptable in Islam is an equivalent exchange, be it on the spot, credit, or a charitable financial accommodation.

Date: 2021-02-20
New Economics Papers: this item is included in nep-isf
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Persistent link: https://EconPapers.repec.org/RePEc:osf:socarx:p6aw7

DOI: 10.31219/osf.io/p6aw7

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