See how Islam encourage the sound global economy through the teachings of Prophet Mohammed (Peace be Upon Him)

دیکھیں کہ کس طرح اسلام پیغمبر محمد صلی اللہ علیہ وسلم کی تعلیمات کے ذریعے مضبوط عالمی معیشت کی حوصلہ افزائی کرتا ہے

Understanding Islamic Banking or Finance:

Islamic economic system believes that Allah is the owner of all property in the world and humans are sent to the earth to perform his responsibilities as per guideline provided by Allah, encourage good deeds and discourage bad deeds.

Islamic Banking:
Islamic banking or finance refers to financial transactions that comply with Shariah law and these concepts are derived from the Quran, Hadtih & Fiqah. Islamic banking is formed on two fundamental principles.

1. The sharing of profits and losses.
2. The prohibition of collecting interest.

Major Prohibition in Islamic Finance:
According to Sharia, Islamic Finance prohibits following matters in business:
• Interest
• Ambiguity
• Gambling
• Manipulation
• Hoarding
• Artificial Price Hiking
• Deception

Most of the time commercial contracts or deals become unsuccessful due to these above factors. So, complying with Islamic finance result a transparent and enduring business relationship, this is the main factor of establishing a sustainable financial system.

See below Hadith of Prophet Mohammed ( Peace be upon him ) to understand Islamic finance directly from Islamic teachings:

It was narrated from ‘Aishah that the Messenger of Allah (ﷺ) said:
‘The best (most pure) food a man consumes is that which he has earned himself, and his child (and his child’s wealth) is part of his earnings.”
حَدَّثَنَا أَبُو بَكْرِ بْنُ أَبِي شَيْبَةَ، وَعَلِيُّ بْنُ مُحَمَّدٍ، وَإِسْحَاقُ بْنُ إِبْرَاهِيمَ بْنِ حَبِيبٍ، قَالُوا حَدَّثَنَا أَبُو مُعَاوِيَةَ، حَدَّثَنَا الأَعْمَشُ، عَنْ إِبْرَاهِيمَ، عَنِ الأَسْوَدِ، عَنْ عَائِشَةَ، قَالَتْ قَالَ رَسُولُ اللَّهِ ـ صلى الله عليه وسلم ـ ‏ “‏ إِنَّ أَطْيَبَ مَا أَكَلَ الرَّجُلُ مِنْ كَسْبِهِ وَإِنَّ وَلَدَهُ مِنْ كَسْبِهِ ‏”‏ ‏.‏

Reference : Sunan Ibn Majah 2137

It was narrated from Miqdam bin Ma’dikarib (Ar- Zubaidi) that the Messenger of Allah (ﷺ) said:
“No man earns anything better than that which he earns with his own hands, and what a man spends on himself, his wife, his child and his servant, then it is charity.”
حَدَّثَنَا هِشَامُ بْنُ عَمَّارٍ، حَدَّثَنَا إِسْمَاعِيلُ بْنُ عَيَّاشٍ، عَنْ بَحِيرِ بْنِ سَعْدٍ، عَنْ خَالِدِ بْنِ مَعْدَانَ، عَنِ الْمِقْدَامِ بْنِ مَعْدِيكَرِبَ الزُّبَيْدِيِّ، عَنْ رَسُولِ اللَّهِ ـ صلى الله عليه وسلم ـ قَالَ ‏ “‏ مَا كَسَبَ الرَّجُلُ كَسْبًا أَطْيَبَ مِنْ عَمَلِ يَدِهِ وَمَا أَنْفَقَ الرَّجُلُ عَلَى نَفْسِهِ وَأَهْلِهِ وَوَلَدِهِ وَخَادِمِهِ فَهُوَ صَدَقَةٌ ‏”‏ ‏.‏

Reference : Sunan Ibn Majah 2138

It was narrated from Ibn ‘Umar that the Messenger of Allah (ﷺ) said:
‘The trustworthy, honest Muslim merchant will be with the martyrs on the Day of Resurrection.”
حَدَّثَنَا أَحْمَدُ بْنُ سِنَانٍ، حَدَّثَنَا كَثِيرُ بْنُ هِشَامٍ، حَدَّثَنَا كُلْثُومُ بْنُ جَوْشَنٍ الْقُشَيْرِيُّ، عَنْ أَيُّوبَ، عَنْ نَافِعٍ، عَنِ ابْنِ عُمَرَ، قَالَ قَالَ رَسُولُ اللَّهِ ـ صلى الله عليه وسلم ـ ‏ “‏ التَّاجِرُ الأَمِينُ الصَّدُوقُ الْمُسْلِمُ مَعَ الشُّهَدَاءِ يَوْمَ الْقِيَامَةِ ‏”‏ ‏.‏

Reference : Sunan Ibn Majah 2139

It was narrated from Isma’il bin ‘Ubaid bin Rifa’ah, from his father, that his grandfather Rifa’ah said:
“We went out with the Messenger of Allah (ﷺ) and the people were trading early in the morning. He called them: ‘O merchants!’ and when they looked up and craned their necks, he said : ‘The merchants will be raised on the Day of Resurrection as immoral people, apart from those who fear Allah and act righteously and speak the truth (i.e. those who are honest).”‘
حَدَّثَنَا يَعْقُوبُ بْنُ حُمَيْدِ بْنِ كَاسِبٍ، حَدَّثَنَا يَحْيَى بْنُ سُلَيْمٍ الطَّائِفِيُّ، عَنْ عَبْدِ اللَّهِ بْنِ عُثْمَانَ بْنِ خُثَيْمٍ، عَنْ إِسْمَاعِيلَ بْنِ عُبَيْدِ بْنِ رِفَاعَةَ، عَنْ أَبِيهِ، عَنْ جَدِّهِ، رِفَاعَةَ قَالَ خَرَجْنَا مَعَ رَسُولِ اللَّهِ ـ صلى الله عليه وسلم ـ فَإِذَا النَّاسُ يَتَبَايَعُونَ بُكْرَةً فَنَادَاهُمْ ‏”‏ يَا مَعْشَرَ التُّجَّارِ ‏”‏ ‏.‏ فَلَمَّا رَفَعُوا أَبْصَارَهُمْ وَمَدُّوا أَعْنَاقَهُمْ قَالَ ‏”‏ إِنَّ التُّجَّارَ يُبْعَثُونَ يَوْمَ الْقِيَامَةِ فُجَّارًا إِلاَّ مَنِ اتَّقَى اللَّهَ وَبَرَّ وَصَدَقَ ‏”‏ ‏.‏

Reference : Sunan Ibn Majah 2146

It was narrated that ‘Umar bin Khattab said:
“I heard the Messenger of Allah (ﷺ) say: ‘Whoever hoards food (and keeps it from) the Muslims, Allah will afflict him with leprosy and bankruptcy.”‘
حَدَّثَنَا يَحْيَى بْنُ حَكِيمٍ، حَدَّثَنَا أَبُو بَكْرٍ الْحَنَفِيُّ، حَدَّثَنَا الْهَيْثَمُ بْنُ رَافِعٍ، حَدَّثَنِي أَبُو يَحْيَى الْمَكِّيُّ، عَنْ فَرُّوخَ، مَوْلَى عُثْمَانَ بْنِ عَفَّانَ عَنْ عُمَرَ بْنِ الْخَطَّابِ، قَالَ سَمِعْتُ رَسُولَ اللَّهِ ـ صلى الله عليه وسلم ـ يَقُولُ ‏ “‏ مَنِ احْتَكَرَ عَلَى الْمُسْلِمِينَ طَعَامَهُمْ ضَرَبَهُ اللَّهُ بِالْجُذَامِ وَالإِفْلاَسِ ‏”‏ ‏.‏

Reference : Sunan Ibn Majah 2155

It was narrated that ‘Ali said:
“The Messenger of Allah (ﷺ) was treated with cupping and he told me to give the cupper his wages.”
حَدَّثَنَا عَمْرُو بْنُ عَلِيٍّ أَبُو حَفْصٍ الصَّيْرَفِيُّ، حَدَّثَنَا أَبُو دَاوُدَ، ح وَحَدَّثَنَا مُحَمَّدُ بْنُ عَبَادَةَ الْوَاسِطِيُّ، حَدَّثَنَا يَزِيدُ بْنُ هَارُونَ، قَالاَ حَدَّثَنَا وَرْقَاءُ، عَنْ عَبْدِ الأَعْلَى، عَنْ أَبِي جَمِيلَةَ عَنْ عَلِيٍّ، قَالَ احْتَجَمَ رَسُولُ اللَّهِ ـ صلى الله عليه وسلم ـ وَأَمَرَنِي فَأَعْطَيْتُ الْحَجَّامَ أَجْرَهُ ‏.‏

Reference : Sunan Ibn Majah 2163

It was narrated from Abu Sa’eed Al-Khudri that :
the Messenger of Allah (ﷺ) forbade Mulamasah and Munabadhah. (Sahih) Sahl added: “Sufyan said: ‘Mulamasah means when a man touches something with his hand without seeing it, and Munabadhah means when he says: “Toss me what you have, and I will toss you what have.”
حَدَّثَنَا أَبُو بَكْرِ بْنُ أَبِي شَيْبَةَ، وَسَهْلُ بْنُ أَبِي سَهْلٍ، قَالاَ حَدَّثَنَا سُفْيَانُ بْنُ عُيَيْنَةَ، عَنِ الزُّهْرِيِّ، عَنْ عَطَاءِ بْنِ يَزِيدَ اللَّيْثِيِّ، عَنْ أَبِي سَعِيدٍ الْخُدْرِيِّ، أَنَّ رَسُولَ اللَّهِ ـ صلى الله عليه وسلم ـ نَهَى عَنِ الْمُلاَمَسَةِ وَالْمُنَابَذَةِ ‏.‏ زَادَ سَهْلٌ قَالَ سُفْيَانُ الْمُلاَمَسَةُ أَنْ يَلْمِسَ الرَّجُلُ الشَّىْءَ بِيَدِهِ وَلاَ يَرَاهُ وَالْمُنَابَذَةُ أَنْ يَقُولَ أَلْقِ إِلَىَّ مَا مَعَكَ وَأُلْقِي إِلَيْكَ مَا مَعِي ‏.‏

Reference : Sunan Ibn Majah 2170

It was narrated from Abu Hurairah that the Prophet (ﷺ) said:
“Do not meet the traders on the way, and whoever meets any of them and buys from him, the vendor has the choice of annulling the transaction when he comes to the marketplace.”
حَدَّثَنَا أَبُو بَكْرِ بْنُ أَبِي شَيْبَةَ، وَعَلِيُّ بْنُ مُحَمَّدٍ، قَالاَ حَدَّثَنَا أَبُو أُسَامَةَ، عَنِ هِشَامِ بْنِ حَسَّانَ، عَنْ مُحَمَّدِ بْنِ سِيرِينَ، عَنْ أَبِي هُرَيْرَةَ، عَنِ النَّبِيِّ ـ صلى الله عليه وسلم ـ قَالَ ‏ “‏ لاَ تَلَقَّوُا الأَجْلاَبَ فَمَنْ تَلَقَّى مِنْهُ شَيْئًا فَاشْتَرَى فَصَاحِبُهُ بِالْخِيَارِ إِذَا أَتَى السُّوقَ ‏”‏ ‏.‏

Reference : Sunan Ibn Majah 2178

It was narrated that Hakim bin Hizam said:
“I said: ‘O Messenger of Allah, a man is asking me to sell him something that I do not possess; Shall I sell it to him?’ He said: ‘Do not sell what is not with you.”‘
حَدَّثَنَا مُحَمَّدُ بْنُ بَشَّارٍ، حَدَّثَنَا مُحَمَّدُ بْنُ جَعْفَرٍ، حَدَّثَنَا شُعْبَةُ، عَنْ أَبِي بِشْرٍ، قَالَ سَمِعْتُ يُوسُفَ بْنَ مَاهَكَ، يُحَدِّثُ عَنْ حَكِيمِ بْنِ حِزَامٍ، قَالَ قُلْتُ يَا رَسُولَ اللَّهِ الرَّجُلُ يَسْأَلُنِي الْبَيْعَ وَلَيْسَ عِنْدِي أَفَأَبِيعُهُ قَالَ ‏ “‏ لاَ تَبِعْ مَا لَيْسَ عِنْدَكَ ‏”‏ ‏.‏

Reference : Sunan Ibn Majah 2187

It was narrated from ‘Uqbah bin ‘Amir or Samurah bin Jundab that the Messenger of Allah (ﷺ) said:
“Any man who sells to two men, it is for the one who was first.”[1]
حَدَّثَنَا حُمَيْدُ بْنُ مَسْعَدَةَ، حَدَّثَنَا خَالِدُ بْنُ الْحَارِثِ، حَدَّثَنَا سَعِيدٌ، عَنْ قَتَادَةَ، عَنِ الْحَسَنِ، عَنْ عُقْبَةَ بْنِ عَامِرٍ، أَوْ سَمُرَةَ بْنِ جُنْدُبٍ عَنِ النَّبِيِّ ـ صلى الله عليه وسلم ـ قَالَ ‏ “‏ أَيُّمَا رَجُلٍ بَاعَ بَيْعًا مِنْ رَجُلَيْنِ فَهُوَ لِلأَوَّلِ مِنْهُمَا ‏”‏ ‏.‏

Reference : Sunan Ibn Majah 2190

It was narrated from Abu Qatadah that the Messenger of Allah (ﷺ), said:
“Beware of swearing oaths when selling, for it may help you to make a sale but it destroys the blessing.”‘
حَدَّثَنَا يَحْيَى بْنُ خَلَفٍ، حَدَّثَنَا عَبْدُ الأَعْلَى، ح وَحَدَّثَنَا هِشَامُ بْنُ عَمَّارٍ، حَدَّثَنَا إِسْمَاعِيلُ بْنُ عَيَّاشٍ، قَالاَ حَدَّثَنَا مُحَمَّدُ بْنُ إِسْحَاقَ، عَنْ مَعْبَدِ بْنِ كَعْبِ بْنِ مَالِكٍ، عَنْ أَبِي قَتَادَةَ، قَالَ قَالَ رَسُولُ اللَّهِ ـ صلى الله عليه وسلم ـ ‏ “‏ إِيَّاكُمْ وَالْحَلِفَ فِي الْبَيْعِ فَإِنَّهُ يُنَفِّقُ ثُمَّ يَمْحَقُ ‏”‏ ‏.‏

Reference : Sunan Ibn Majah 2209

It was narrated from Ibn ‘Umar that the Messenger of Allah (ﷺ) said:
“Do not sell fruits until they have ripened.” And he forbade (both) the seller and the purchaser (to engage in such a transaction).
حَدَّثَنَا مُحَمَّدُ بْنُ رُمْحٍ، أَنْبَأَنَا اللَّيْثُ بْنُ سَعْدٍ، عَنْ نَافِعٍ، عَنِ ابْنِ عُمَرَ، عَنْ رَسُولِ اللَّهِ ـ صلى الله عليه وسلم ـ قَالَ ‏ “‏ لاَ تَبِيعُوا الثَّمَرَةَ حَتَّى يَبْدُوَ صَلاَحُهَا ‏”‏ ‏.‏ نَهَى الْبَائِعَ وَالْمُشْتَرِيَ ‏.‏

Reference : Sunan Ibn Majah 2214

It was narrated from Anas bin Malik that :
the Messenger of Allah (ﷺ) forbade selling fruits until they have changed the color, and selling grapes until they have turned black, and selling grains until they have hardened.
حَدَّثَنَا مُحَمَّدُ بْنُ الْمُثَنَّى، حَدَّثَنَا حَجَّاجٌ، حَدَّثَنَا حَمَّادٌ، عَنْ حُمَيْدٍ، عَنْ أَنَسِ بْنِ مَالِكٍ، أَنَّ رَسُولَ اللَّهِ ـ صلى الله عليه وسلم ـ نَهَى عَنْ بَيْعِ الثَّمَرَةِ حَتَّى تَزْهُوَ وَعَنْ بَيْعِ الْعِنَبِ حَتَّى يَسْوَدَّ وَعَنْ بَيْعِ الْحَبِّ حَتَّى يَشْتَدَّ ‏.‏

Reference : Sunan Ibn Majah 2217

It was narrated from Jabir bin ‘Abdullah that :
the Messenger of Allah (ﷺ) forbade selling for many years ahead.
حَدَّثَنَا هِشَامُ بْنُ عَمَّارٍ، وَمُحَمَّدُ بْنُ الصَّبَّاحِ، قَالاَ حَدَّثَنَا سُفْيَانُ، عَنْ حُمَيْدٍ الأَعْرَجِ، عَنْ سُلَيْمَانَ بْنِ عَتِيقٍ، عَنْ جَابِرِ بْنِ عَبْدِ اللَّهِ، أَنَّ رَسُولَ اللَّهِ ـ صلى الله عليه وسلم ـ نَهَى عَنْ بَيْعِ السِّنِينَ ‏.‏

Reference : Sunan Ibn Majah 2218

It was narrated from Jabir bin ‘Abdullah that the Messenger of Allah (ﷺ) said:
“When you weigh, allow more. “
حَدَّثَنَا مُحَمَّدُ بْنُ يَحْيَى، حَدَّثَنَا عَبْدُ الصَّمَدِ، حَدَّثَنَا شُعْبَةُ، عَنْ مُحَارِبِ بْنِ دِثَارٍ، عَنْ جَابِرِ بْنِ عَبْدِ اللَّهِ، قَالَ قَالَ رَسُولُ اللَّهِ ـ صلى الله عليه وسلم ـ ‏ “‏ إِذَا وَزَنْتُمْ فَأَرْجِحُوا ‏”‏ ‏.‏

Reference : Sunan Ibn Majah 2222

It was narrated that Abu Hamra’ said:
“I saw the Messenger of Allah (ﷺ) pass by a man having food in a vessel. He put his hand in it and said: ‘Perhaps you are cheating. Whoever cheats us is not one of us.”‘
حَدَّثَنَا أَبُو بَكْرِ بْنُ أَبِي شَيْبَةَ، حَدَّثَنَا أَبُو نُعَيْمٍ، حَدَّثَنَا يُونُسُ بْنُ أَبِي إِسْحَاقَ، عَنْ أَبِي دَاوُدَ، عَنْ أَبِي الْحَمْرَاءِ، قَالَ رَأَيْتُ رَسُولَ اللَّهِ ـ صلى الله عليه وسلم ـ مَرَّ بِجَنَبَاتِ رَجُلٍ عِنْدَهُ طَعَامٌ فِي وِعَاءٍ فَأَدْخَلَ يَدَهُ فِيهِ فَقَالَ ‏ “‏ لَعَلَّكَ غَشَشْتَهُ مَنْ غَشَّنَا فَلَيْسَ مِنَّا ‏”‏ ‏.‏

Reference : Sunan Ibn Majah 2225

It was narrated that Salman said :
“I heard the Messenger of Allah (ﷺ) saying: ‘Whoever goes to the Morning prayer first thing in the morning, he goes out with the banner of faith but whoever goes out to the marketplace first thing in the morning, he goes out under the banner of Iblis (Satan).’ “
حَدَّثَنَا إِبْرَاهِيمُ بْنُ الْمُسْتَمِرِّ الْعُرُوقِيُّ، حَدَّثَنَا أَبِي، حَدَّثَنَا عُبَيْسُ بْنُ مَيْمُونٍ، حَدَّثَنَا عَوْنٌ الْعُقَيْلِيُّ، عَنْ أَبِي عُثْمَانَ النَّهْدِيِّ، عَنْ سَلْمَانَ، قَالَ سَمِعْتُ رَسُولَ اللَّهِ ـ صلى الله عليه وسلم ـ يَقُولُ ‏ “‏ مَنْ غَدَا إِلَى صَلاَةِ الصُّبْحِ غَدَا بِرَايَةِ الإِيمَانِ وَمَنْ غَدَا إِلَى السُّوقِ غَدَا بِرَايَةِ إِبْلِيسَ ‏”‏ ‏.‏

Reference : Sunan Ibn Majah 2234

It was narrated from ‘Uqbah bin ‘Amir that the Messenger of Allah (ﷺ) said:
“There is no contractual obligation after four (days).”
حَدَّثَنَا عَمْرُو بْنُ رَافِعٍ، حَدَّثَنَا هُشَيْمٌ، عَنْ يُونُسَ بْنِ عُبَيْدٍ، عَنِ الْحَسَنِ، عَنْ عُقْبَةَ بْنِ عَامِرٍ، أَنَّ رَسُولَ اللَّهِ ـ صلى الله عليه وسلم ـ قَالَ ‏ “‏ لاَ عُهْدَةَ بَعْدَ أَرْبَعٍ ‏”‏ ‏.‏

Reference : Sunan Ibn Majah 2245

It was narrated that Wathilah bin Asqa’ said:
“I heard the Messenger of Allah (ﷺ) say: ‘Whoever sells defective goods without pointing it out, he will remain subject to the wrath of Allah, and the angels will continue to curse him.'”
حَدَّثَنَا عَبْدُ الْوَهَّابِ بْنُ الضَّحَّاكِ، حَدَّثَنَا بَقِيَّةُ بْنُ الْوَلِيدِ، عَنْ مُعَاوِيَةَ بْنِ يَحْيَى، عَنْ مَكْحُولٍ، وَسُلَيْمَانَ بْنِ مُوسَى، عَنْ وَاثِلَةَ بْنِ الأَسْقَعِ، قَالَ سَمِعْتُ رَسُولَ اللَّهِ ـ صلى الله عليه وسلم ـ يَقُولُ ‏ “‏ مَنْ بَاعَ عَيْبًا لَمْ يُبَيِّنْهُ لَمْ يَزَلْ فِي مَقْتٍ مِنَ اللَّهِ وَلَمْ تَزَلِ الْمَلاَئِكَةُ تَلْعَنُهُ ‏”‏ ‏.‏

Reference : Sunan Ibn Majah 2247

It was narrated that Malik bin Aws bin Hadathan Nasri said:
“I heard ‘Umar bin Al-Khattab say: ‘The Messenger of Allah (ﷺ) said: “Exchanging gold for gold is usury unless it is done on the spot. (Exchanging) wheat for wheat is usury, unless it is done on the spot. (Exchanging) barley for barley is usury unless it is done on the spot. (Exchanging) dates for dates is usury, unless it is done on the spot.”
حَدَّثَنَا أَبُو بَكْرِ بْنُ أَبِي شَيْبَةَ، وَعَلِيُّ بْنُ مُحَمَّدٍ، وَهِشَامُ بْنُ عَمَّارٍ، وَنَصْرُ بْنُ عَلِيٍّ، وَمُحَمَّدُ بْنُ الصَّبَّاحِ، قَالُوا حَدَّثَنَا سُفْيَانُ بْنُ عُيَيْنَةَ، عَنِ الزُّهْرِيِّ، عَنْ مَالِكِ بْنِ أَوْسِ بْنِ الْحَدَثَانِ النَّصْرِيِّ، قَالَ سَمِعْتُ عُمَرَ بْنَ الْخَطَّابِ، يَقُولُ قَالَ رَسُولُ اللَّهِ ـ صلى الله عليه وسلم ـ ‏ “‏ الذَّهَبُ بِالذَّهَبِ رِبًا إِلاَّ هَاءَ وَهَاءَ وَالْبُرُّ بِالْبُرِّ رِبًا إِلاَّ هَاءَ وَهَاءَ وَالشَّعِيرُ بِالشَّعِيرِ رِبًا إِلاَّ هَاءَ وَهَاءَ وَالتَّمْرُ بِالتَّمْرِ رِبًا إِلاَّ هَاءَ وَهَاءَ ‏”‏ ‏.‏

Reference : Sunan Ibn Majah 2253

It was narrated that Malik bin Aws bin Hadathan said:
“I came saying. ‘Who will exchange Dirham?’ Talhah bin ‘Ubaidullah, who was with ‘Umar bin Khattab, said: ‘Show us your gold, then come to us; when our treasure comes, we will give you your silver.’ ‘Umar said: ‘No, by Allah, you will give him silver (now), or give him back his gold, for the Messenger of Allah (ﷺ) said: “Silver for gold is usury, unless it is exchanged on the spot.”‘
حَدَّثَنَا مُحَمَّدُ بْنُ رُمْحٍ، أَنْبَأَنَا اللَّيْثُ بْنُ سَعْدٍ، عَنِ ابْنِ شِهَابٍ، عَنْ مَالِكِ بْنِ أَوْسِ بْنِ الْحَدَثَانِ، قَالَ أَقْبَلْتُ أَقُولُ مَنْ يَصْطَرِفُ الدَّرَاهِمَ فَقَالَ طَلْحَةُ بْنُ عُبَيْدِ اللَّهِ وَهُوَ عِنْدَ عُمَرَ بْنِ الْخَطَّابِ أَرِنَا ذَهَبَكَ ثُمَّ ائْتِنَا إِذَا جَاءَ خَازِنُنَا نُعْطِكَ وَرِقَكَ ‏.‏ فَقَالَ عُمَرُ كَلاَّ وَاللَّهِ لَتُعْطِيَنَّهُ وَرِقَهُ أَوْ لَتَرُدَّنَّ إِلَيْهِ ذَهَبَهُ فَإِنَّ رَسُولَ اللَّهِ ـ صلى الله عليه وسلم ـ قَالَ ‏ “‏ الْوَرِقُ بِالذَّهَبِ رِبًا إِلاَّ هَاءَ وَهَاءَ ‏”.

Reference : Sunan Ibn Majah 2260

It was narrated from Umar bin Muhammad bin ‘Ali bin abi Talib, from his father, that his grandfather said:
‘The Messenger of Allah (ﷺ) said: ‘Dinar for Dinar, Dirham for Dirham, with no increase between them. Whoever has need of silver, let him trade gold for it, and whoever has need of gold, let him trade silver for it, and let the transaction be done on the spot.”‘
حَدَّثَنَا أَبُو إِسْحَاقَ الشَّافِعِيُّ، إِبْرَاهِيمُ بْنُ مُحَمَّدِ بْنِ الْعَبَّاسِ حَدَّثَنِي أَبِي، عَنْ أَبِيهِ الْعَبَّاسِ بْنِ عُثْمَانَ بْنِ شَافِعٍ، عَنْ عُمَرَ بْنِ مُحَمَّدِ بْنِ عَلِيِّ بْنِ أَبِي طَالِبٍ، عَنْ أَبِيهِ، عَنْ جَدِّهِ، قَالَ قَالَ رَسُولُ اللَّهِ ـ صلى الله عليه وسلم ـ ‏ “‏ الدِّينَارُ بِالدِّينَارِ وَالدِّرْهَمُ بِالدِّرْهَمِ لاَ فَضْلَ بَيْنَهُمَا فَمَنْ كَانَتْ لَهُ حَاجَةٌ بِوَرِقٍ فَلْيَصْطَرِفْهَا بِذَهَبٍ وَمَنْ كَانَتْ لَهُ حَاجَةٌ بِذَهَبٍ فَلْيَصْطَرِفْهَا بِالْوَرِقِ وَالصَّرْفُ هَاءَ وَهَاءَ ‏”‏ ‏.‏

Reference : Sunan Ibn Majah 2261

It was narrated from Abu Hurairah that the Messenger of Allah (ﷺ) said:
“There are seventy degrees of usury, the least of which is equivalent to a man having intercourse with his mother.”
حَدَّثَنَا عَبْدُ اللَّهِ بْنُ سَعِيدٍ، حَدَّثَنَا عَبْدُ اللَّهِ بْنُ إِدْرِيسَ، عَنْ أَبِي مَعْشَرٍ، عَنْ سَعِيدٍ الْمَقْبُرِيِّ، عَنْ أَبِي هُرَيْرَةَ، قَالَ قَالَ رَسُولُ اللَّهِ ـ صلى الله عليه وسلم ـ ‏ “‏ الرِّبَا سَبْعُونَ حُوبًا أَيْسَرُهَا أَنْ يَنْكِحَ الرَّجُلُ أُمَّهُ ‏”‏ ‏.‏

Reference : Sunan Ibn Majah 2274

Major Reasons and Consequences of Financial Crisis:

The first and key reason behind financial crisis is leverage. In conventional system people used to borrow fund. In return financial institutions charge interest on the borrowed amount. There is no economic activity occurred during the transactions and it is like exchanging money against money. In long run, clients fall into the vicious cycle of debt and leads to bankruptcy. High leverage also creates bubble in economy through illusory increase of asset price.
In recent time, many Non-Muslims are also contributing in Islamic finance. This is because people are now becoming more conscious about financial decision. Mostly the negative side of Riba e.g. vicious credit cycle drives people to Islamic banks.

I hope this article will be helpful to understand some basic of Islamic finance .

Aftab Alam

Riyadh – KSA