This document discusses various Islamic financial concepts including riba (interest/usury), bai (buying and selling), profit, investment, and rent. It provides dictionary and technical definitions of riba, discusses its prohibitions in the Quran and hadiths, and distinguishes between riba nasiah (interest on loans with time delay) and riba al-fadl (interest in exchange transactions). The importance of bai and profit in Islam is explained. Rent is defined as the price paid for the services of non-fungible goods and humans. The document also notes that all parties in a riba transaction are considered equally guilty.

1. Riba, Bai, Profit & Rent
Presented by
Md. Fariduddin Ahmed
Former Managing Director & CEO
Islami Bank Bangladesh Limited
Export Import Bank of Bangladesh Ltd.
Sponsor CEO Jaiz Bank Ltd, Nigeria
Former Advisor
Export Import Bank of Bangladesh Ltd.
Former Head of Islamic Banking
AB Bank Limited
Secretary General
Bangladesh Islamic Banker’s Association
Member: Shariah Supervisory Committee
of several Islamic Banks

2. Dictionary Meaning: Arabic word Riba means
increase, excess, expansion, addition, growth,
superior, increase of anything from its original
amount.
Technical Meaning: It means interest/usury/sud
etc. An increase which is without an equal counter
value or iwad.
Riba
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3. Riba in the Holy Quran (Riba Nasiah)
There are four revelations in the Holy Quran
concerning Riba. These are:
1st
Revelation: Surah Al-Rum, Verse-39
2nd
Revelation: Surah Al-Nisa, Verse-160-161
3rd
Revelation: Surah Ale- Imran, Verse-130
4th
Revelation: Surah Al-Baqarah, Verse-275-281
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Riba

4. From Ubadah Ibn Samit: The Messenger of Allah
(s) said,
“Gold for gold, silver for silver, wheat for wheat,
barley for barley, dates for dates, and salt for salt-
like for like, equal for equal and hand to hand; if the
commodities differ, then you may sell as you wish,
provided that the exchange is hand to hand.”
(Muslim).
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Riba al-Fadl:
Riba in the Sunnah:

5. “If you lend money to a poor man, don’t become
money lender and don’t realize interest from him.”
- Exodus, 22nd
line
“You don’t lend money to your brother for interest-
i.e. interest on money, interest on food stuff and
interest on anything lent.”
- Deuteronomy, 23rd
line
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Jewism:
Riba in the other Religions:

6. “Lend hopping for nothing again.” - Luke VI 35
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Christianity:
Riba in the other Religions:
Hinduism:
“Usury business is restricted within the Baithayas.”
- Manusanghitaya
Buddism:
“Budda stipulated that a debtor can not become a
Monk or Nun, mainly so that people would not use
the monastic Sangha as a refuge from their financial
responsibilities.”
- www.buddhisma2z.com

7. In case of riba nasiah there is a time lag between
give and take back of the counter values; but in riba
fadl there is no time lag in between give and take of
counter values.
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Distinction between Riba Nasiah and
Riba al-Fadl:

8. a) “Bai” means Buying and Selling.
b) “Bai” means exchange of goods for goods,
exchange of goods for money, exchange of
money for money.
c) “Bai” means exchange of counter values.
d) Bai is taking of a goods by payment of
recompense/indemnity.
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Bai/Buying and Selling:
Meaning of Bai:

9. a) Equivalence: equality of counter values.
b) Reciprocity: Reciprocal exchange of counter
values. Bai is a commutative contract.
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Conditions of Bai:

10. Arabic word for profit is ‘Ribhun’. This means
growth, surplus, residual, addition to capital. On
the other hand loss means erosion of capital.
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Profit:
Origin of Profit:
Profit emanates from investment and no investment
is possible without Bai.

11. Investment means to buy goods and services with a
view to earning profit with risk of loss. When these
goods and services are sold again, money comes
back. This cyclic process may be expressed as
follows:
‘Transformation of Money into goods with risk of
loss, again Transformation of goods into Money’.
Thus investment requires both capital and efforts.
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Definition of Investment:

12. 1. Bai is essential for human existence/survival.
2. Exchange is the foundation and essential
characteristics of market economy. It co-
ordinates between production and consumption.
3. Trade is a Social obligation of all members of the
society- Farde Keyfaya.
4. Al-Quran declares profit as the bounty of Allah.
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Importance of Bai and Profit:

13. 5. Profit is the driving force of economic activities.
6. Profit is the source of Rizq.
7. Acquisition of profit through business has been
encouraged in the Quran and Sunnah.
8. There is no limit to profit in Islam as there is no
limit to loss.
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Importance of Bai and Profit:

14. In Arabic it is termed as Ajr which means
consideration, exchange value, reward, wages, etc.
It is the price of service of non-fungible goods,
human beings and animal.
The term ‘Ijarah’ has been derived from ‘Ajr’. Ijarah
is one kind of Bai/Buying and Selling. It is a
mechanism by which the services (usufruct) of non-
fungible goods, human beings and animal are sold
in exchange of Rent (Ajr) keeping the goods and its
ownership unsold. Thus it is an exchange of counter
value, one side being the service and the other side
the ‘Rent’. Therefore, it is Halal.
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Rent:

15. From Jabir :
The Prophet (s) cursed the receiver and the payer of
interest, the one who record it and the two
witnesses to the transaction and said, “They are all
alike (in guilt)”
- (Muslim, Tirmidhi and Musnad Ahmad)
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Sin in Riba transactions:

16. World Population by Religion
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17. Thanks for your
Co-operaTion
Allah Hafez