An
Analytical Review of Different Concepts of Riba
(Interest) in the Sub-Continent
Farooq Aziz*, Muhammad Mahmud** and Emad ul Karim***
Abstract
The traditional concept of Riba (interest) is an excess
amount on loan, which creditor receives from debtor on
the repayment of loan. There is almost a consensus on
the sprit of this concept that it is traditional thought
or school; but along with that some other point of views
also exist, which present Riba, in somewhat different
ways, will be termed as non-traditional approach in this
paper. Both of these schools are agreed on the point
that, Riba is just restricted to debt, and the increment
on it is Riba; but the main difference among these is
that: former approach claims that, each and every
addition on loan, regardless of purpose and time
duration of loan is Riba; but, the later approach
demand’s some room for that on different grounds.
Actually both of them do not have any sound base. When
the concept of unearned income (the income, which is not
the result of human labor), is a recognized fact in
Islamic economics in different forms, like: ijara
(rent), Mudoraba and Mazara’a (Share Cropping); then
definitely no logical reason is left to avoid excess
income on loan. Both approaches are just unable to give
a concrete concept of Riba.
JEL. Classification: E43; E51; P51; P52; P59; P45
Keywords: Riba, Interest, Rent, Share Cropping
