The holy prophet sall allahu alayhi wa sallam felt

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The Holy Prophet, Sall-Allahu alayhi wa sallam, felt that, given the commercial atmosphere at that time, certain barter transactions might lead the people to indulge in Riba. The Arabs used certain commodities like wheat, barley, dates etc., as a medium of exchange to purchase other things. The Holy Prophet, Sall- Allahu alayhi wa sallam, treating these commodities as a medium of exchange like money, issued the following injunction: "Gold for gold, silver for silver, wheat for wheat, barley for barley, date for date, salt for salt, must be equal on both sides and hand to hand. Whoever pays more or demands more (on either side) indulges in Riba." 28 Islamic Banking
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Sources of Shariah: Definition of Riba Consumption or Productive Loans Questions: Holy Qur'an had prohibited to claim any increase over and above the principal in the case of consumption loans only, where the borrowers used to be poor person's borrowing money to meet their day to day needs of food and clothes etc. Since no productive loans were in vogue in the days of Holy Prophet, Sall- Allahu alayhi wa sallam, it was not contemplated by the verse of Riba to prohibit a charge on the commercial and productive loans. Otherwise also, they argued, it is injustice to claim any additional amount on the principal from a poor person, but it is not so in the case of a rich man who borrows money to develop his own commercial enterprise and earn huge profits through it. 29 Islamic Banking
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Sources of Shariah: Consumption or Productive Loans How poor are you? Validity of a Transaction is not Based on the ‘Financial Status of a Party’ It rather depends on the intrinsic nature of the transaction itself. If a transaction is valid by its nature, it is valid irrespective of whether the parties are rich or poor. Sale, for example, is a valid transaction whereby a lawful profit is generated. It is allowed regardless of whether the purchaser is rich or poor. Gambling is prohibited for both rich and poor persons. Bribery is unlawful regardless of whether the bribe is charged from the rich or from the poor. Poverty is a relative term ! 30 Islamic Banking
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Sources of Shariah: Consumption or Productive Loans The Nature of Quranic Prohibitions The verses which prohibit riba do not at all differentiate between a consumption or a commercial loan, nor does this difference find any mention whatsoever in the vast literature of the Sunnah. The Holy Qur'an has prohibited riba in general terms which includes all the forms of riba whether or not prevalent at the time of its revelation. When the Holy Qur'an prohibits a transaction, it is not a particular form of the transaction that is meant by the prohibition. It is the basic concept of the transaction which is hit by the injunction. When liquor was prohibited, it was not only the particular forms of liquor available in those days which were forbidden, it was the substance of liquor which was banned, and nobody can reasonably claim that the new forms of liquor which were not available in the days of the Holy Prophet, Sall-Allahu alayhi wa sallam, are not hit by the prohibition.
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