BASIS FOR PROHIBITION OF MAYSIR AND GHARAR

GHARAR

In simple terms, gharar means uncertainty, risk, threat, deceit, doubt, e.t.c. It is described as a risky or hazardous sale, where details concerning the item on sale are unknown or uncertain. Professor Mustafa Al Zarqa' defined Gharar as the sale of probable items whose existence or characteristics are not certain, due to the risky nature which makes the trade similar to gambling. While some degree of Gharar may be unavoidable in some situations, excessive uncertainty must be avoided.

'Ahmad and 'Ibn Majah narrated on the authority of 'Abu Said Al Khudriy :

The Prophet (pbuh) has forbidden the purchase of the unborn animal in its mother's womb, the sale of the milk in the udder without measurement, the purchase of spoils of war prior to their distribution, the purchase of charities prior to their receipt, and the purchase of the catch of a diver.

CONCEPT OF RIBA

Since the early years, Riba has been regarded as any extra amount demanded by a borrower above the capital given. Definition of Riba is not expressly spelt out in the Qur’an but the term as used in the Qur’an denotes “increase”, “swelling”, “growth”.  Islamic scholars have defined Riba has the doubling or quadrupling of the sum lent. Abu al A’la al Mawdudi defined riba as “a predetermined excess or surplus over and above the loan received by the creditor conditionally in relation to a specified period”. The question that arises is “Is every increase over principal riba?” The only acceptable form of growth (increase in capital) is that which is tied to productive engagement in lawful trade and activities involving tangible assets.

  "...whereas Allah has permitted trading and forbidden Riba...  (2:275)

THE BELIEFS THAT UNDERPIN ISLAMIC ECONOMICS

Islam is hinged on the belief in one true God, the Sustainer of the universe. It has its belief deeply rooted in the Hadith which is the life and teachings of the Prophet (Sunnah) recorded by the Companions and handed down to later generations, and the Qur’an revealed to Prophet Mohammed.

In the same vein, Islamic economics is in accordance with the Islamic law which is based on divine revelations and inculcates all aspects of human life with accountability, and the resourceful and equitable use of resources.

The beliefs that underpin Islamic economics are treated under the following headings:

Trusteeship

Islam reiterates that all things are owned solely by Allah. All wealth is entrusted to human being by God and account will be given on how the wealth is spent. And because man is a Khalifa (trustee), he is not expected to hoard and deny others who are in need of the surplus wealth but rather share amongst the poor and the needy.

Quran says:

“Lo! We offered the trust unto the heavens and the earth and the hills, but they shrank from bearing it and were afraid of it. And man assumed it. Lo! he hath proved a tyrant and a fool.”

(33:72)

WELFARE IN ISLAM AND THE RESPONSIBILITIES OF INDIVIDUALS IN AN ISLAMIC ECONOMIC FRAMEWORK

Islam is a universal religion of compassion which believes in the welfare of mankind. It not only aims at the spiritual wellbeing of man but also at its economic and material interests. Its economic and material function includes providing the basic necessities for people and creating social fairness while its spiritual function include establishing Islamic way of life for Muslim and absolute religious liberty for non-Muslims.

In as much as Islam accepts the fundamental principle of market economy, such as ownership right, business freedom and competition, their effort in lessening the anguish and exploitation of people have been futile.

SALIENT FEATURES OF ISLAMIC ECONOMICS IN CONTRAST TO CONVENTIONAL ECONOMICS

The salient features of Islamic Economics in Contrast to Conventional Economics has been highlighted under the following headings.

INTEREST (RIBA)

The institution of banking and interest is the main principle of conventional economics. Trade, business and economic ventures require huge sum of money which no individual may be willing or able to single handedly give. This leads to the institution of banking and interest where the bank acts as intermediary collecting money from individual on low interest rates, adding its own margin and lending out to businesses that needs the fund at a higher rate of interest. This is the fundamental on which conventional economics is premised. There is the belief that man is not motivated to give his money or resources without any material gain associated with such lending in the form of interest.

Conversely, Islam considers interest as the most unfair institution for humanity and has abolished it in its entirety. Wealth can only be generated through lawful deal and investment. Any profits relating to these deals are shared between the person providing the resources and the person providing the skill. According to the Qur’an, taking interest is compared to war against God and the Prophet. This can be found in the following verse of the Qur’an:

O ye who believe! Observe your duty to Allah, and give up what remaineth (due to you) from usury, if ye are (in truth) believers. And if ye do not, then be warned of war (against you) from Allah and His messenger. And if ye repent, then ye have your principal (without interest). Wrong not and ye shall not be wronged.

(2:278-279)