International, United Kingdom
Is the payment of interest. The prohibition on riba stems from the Sharia tenet that money, by itself, should not be recognised as a commodity and consequently, there should be no reward for its use. Under Sharia, money is perceived only as a medium of exchange and a unit of measurement. Islamic derivative products must therefore be based on underlying transactions in tangible commodities as opposed to merely superficial cash flows. In this context, it is important to note that while Sharia prohibits riba, it does not prohibit trade or the making of profits as part of such trade(s). In fact, the Quran expressly alludes to the distinction between trade and riba in the following passage:
"Those who eat riba do not stand except as stands one whom Shaytan has by the touch thrown into confusion. That is because they say: 'Sale is like riba'. God has permitted trade and forbidden riba."
+ riba
International, USA
Often interpreted as a prohibition against interest, riba is more broadly defined as a prohibition against unjust enrichment or advantage obtained by a lender without regard to risk or additional consideration. For example, in a conventional financing, a borrower must pay interest to the lender on the loan even if the borrower's business is unsuccessful. This structure does not comply with Sharia because the lender did not do anything to earn the additional funds and is not sharing in the risks of the business. Riba does not prohibit parties from earning a return on their investments but this return must be based on the profitability of the business. Riba also prohibits transactions with guaranteed returns.
Because interest is a fundamental aspect of conventional loan transactions, Islamic finance transactions are generally structured to avoid the borrower having to pay interest while allowing the lender to make a profit.

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

Игры ⚽ Поможем написать реферат

Look at other dictionaries:

  • Riba — (Arabic: ربا, IPA2|rɪbæː) means usury and is forbidden in Islamic economic jurisprudence.Qur anThe Qur an states the following on Riba:AhadithRiba is also mentioned in Ahadith and is considered one of the seven major sins:cquote|Narrated Az Zuhri …   Wikipedia

  • riba — rȉba ž <G mn rȋbā> DEFINICIJA 1. (mn) zool. životinje koje žive u vodi sa škrgama kao organom za disanje i perajama za plivanje (Pisces) [morska riba; riječna riba; slatkovodna riba] 2. kulin. riblje meso, jelo od ribe 3. rel. u kršćanskoj… …   Hrvatski jezični portal

  • riba — statusas T sritis informatika apibrėžtis Dydžio kitimo kraštinė pastovioji reikšmė, prie kurios jis artėja. Tai matematikos terminas, vartojamas kai kalbama apie ↑tolydžiuosius dydžius. pavyzdys( iai) apatinė riba, baigtinė riba, begalinė riba,… …   Enciklopedinis kompiuterijos žodynas

  • Riba — steht bezeichnet: Riba (Schari a), das Zinsnahmeverbot im Arabischen. La Riba, eine Gemeinde in Katalonien (Spanien) RIBA ist Abkürzung für Royal Institute of British Architects Recombinant Immunoblot Assay Ri.Ba. für Ricevute bancarie , einer… …   Deutsch Wikipedia

  • Riba — Saltar a navegación, búsqueda El término Riba puede referirse a: Contenido 1 Lugares de España 1.1 Provincia de Burgos 1.2 Provincia de Guadalajara …   Wikipedia Español

  • RIBA — steht für: La Riba, eine Gemeinde in Katalonien (Spanien) als Abkürzung RIBA für Royal Institute of British Architects Recombinant Immunoblot Assay den Zinswucher bzw. ganz allgemein die Zinsnahme im Arabischen diese ist nach der Schari a… …   Deutsch Wikipedia

  • riba — ribà dkt. Ùpė yrà dviejų̃ rajònų gamti̇̀nė ribà …   Bendrinės lietuvių kalbos žodyno antraštynas

  • Riba — riba, ribo nf rive, pente ravinée, rebord d un champ, bord d un ruisseau Alpes Maritimes …   Glossaire des noms topographiques en France

  • riba — s. f. 1. Margem elevada do rio; arriba; ribanceira. 2.  [Brasil] Espécie de galga com que se descasca o café. • adv. 3. Em cima …   Dicionário da Língua Portuguesa

  • rība- — *rība , *rībaz, *reiba , *reibaz, *reifa , *reifaz? germ., Adjektiv: nhd. freigiebig, befriedigend; ne. generous; Rekontruktionsbasis: an., ae., mnl., mnd.; Etymologie: s. ing. *reip …   Germanisches Wörterbuch

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”