Tag Archives: usury

The Harm of The Habit of Being in Debt

The Harm of The Habit of Being in Debt

Author: Said Yai bin Imanul Huda, MA

Islam is a noble religion. Islam already oversees all aspects in social life, including debt and credit. Not only does Islam allow a man to owe other, it also regulates the etiquettes and rules in debt.
The basic ruling of debt is permissible (jaa-iz)

Allah the Glorified and Exalted mentioned some of the etiquettes in debt inside the Qur’an. Allaj the Glorified and Exalted decreed,

{ يَا أَيُّهَا الَّذِينَ آمَنُوا إِذَا تَدَايَنْتُمْ بِدَيْنٍ إِلَى أَجَلٍ مُسَمًّى فَاكْتُبُوهُ }

Believers! Whenever you contract a debt from one another for a known term, commit it to writing.” (Chapter Al Baqara/The Cow:282)

Even the Messenger of Allah -peace and prayer of Allah be upon him- once indebted to other. At the end of his life, he still owed a jew, and his debt was paid with the armor that he mortgaged to that person
It is narrated from ‘Aisha -may Allah be pleased with her- that she said,

( أَنَّ النَّبِيَّ -صلى الله عليه وسلم- اشْتَرَى طَعَامًا مِنْ يَهُودِيٍّ إِلَى أَجَلٍ فَرَهَنَهُ دِرْعَهُ )

“The Prophet -peace and prayer of Allah be upon him- bought food from a jew not in cash, thus he mortgaged his armor to him.” (Narrated by Al-Bukhari no. 2200)
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Mudharaba of Shari’a Bank: Sharing Usury that is masked with the label “Shari’a”

Scholarship from Bank

Sharing Usury that is masked with the label “Shari’a”

Inside the practice of mudharaba product in shari’a bank, there is a controversial stipulation, that is: the mudharib (fund manager) is required to give full warranty over the fund lent by bank from any kind of loss. The product is considered as a new invention in mudharaba that is never been seen before. It is called mudharabah musytarakah.

mudharabah musytarakah is a combination of two words, mudharabah and musytarakah.

The meaning of mudharaba is transaction of investment between the funder (money/asset owner/shahibul mal) and the fund manager (mudharib) to start a certain business with profit-sharing system based on percentage agreed by both parties, whereas the loss of capital will only be borne by the funder.

Musytarakah means: union, combination or group. Thus essentially, Mudharabah musytarakah is a common mudharaba modified into a product of shari’a bank to replace  saving/deposit with interest of conventional bank.
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Ruling of Bank Deposit

Ruling of Bank Deposit

Definition of Bank Deposit

Author: Ustadz Said Yai Ardiansyah, MA

One of the products issued by bank is deposit. Deposit is a kind of saving that can not be withdrawn until the certain period of time agreed ends, with the benefit of obtaining percentage of profit from the deposited money. If it is drawn before the its due time, then the bank will charge the owner with some fines.

The example is as follows:

Joko wanted to save his money in deposit account. He deposited IDR 50 millions of his money in 3 months period. The interest rate of deposit is 5% per year, thus, in each month, he received = IDR  50 millions x 5 % : 12 months =IDR 208.333,33. Next, the sum is charged with income tax of 20%, hence, in three months, Joko received IDR 208.333,33 x 3 months = IDR 625.000,00 before taxed.

Joko needn’t to worry about the money he deposited, since it certainly yields profit albeit small. Even though the bank goes bankrupt, or suffers from losses, it still has to pay the profit/interest of his money.
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Usury, Troubles you In this World and the Hereafter

usury

Usury, Troubles you In this World and the Hereafter

Supposed that there was a news about a son who raped his own mother, I believe waves of curses to this culprit who did a very vile act would come massively! Surely no one with straight mind will support this evil deed.

But what about a commercial of a bank which promoted low-interest credit? Will there be denial for that usurious practice? Or will it be considered as a common news, or even get some praises due to the low rate of interest? And contrary to it, a preacher who reminded people of the danger of engaging with bank in such kind of transaction, will be labelled as too strict, extreme, stern, and other bad stigma?
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Ruling of Ancient Money Trading

usury

Ruling of Ancient Money Trading

Question:

Assalamu’alaikum. I’d like to ask about what is the ruling of ancient money/currency trading? For example, for IDR 1,- of the ancient money, the buyer should pay the price of IDR 15.000,-. Is it considered as usury? Since recently, there were many dowries that were paid using the nominal unit of rupiah, such as IDR 14,-. Please explain it to us, may Allah reward you with plenty of goodnesses.

From: Muttaqin

Answer:

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