Usury (Riba), Gharar (Uncertainty) & Maysir (Gambling)

Topics: Game theory, Zero-sum, Nash equilibrium Pages: 12 (3342 words) Published: April 11, 2013



In literal meaning, riba or interest means excess,increase or addition.

In Islamic terminology, riba means effortless profit or the profit that comes from the late payment from the loan. The interest charge for late payment in the repayment of a loan is considered as riba.

(an-nahlu : 90)

Allah allows trade and prohibited riba (2 : 275)

Interest is only considered as riba if the amount loaned is “doubled and re-doubled” (3 : 130)


Riba an-nasi’ah is the stipulated interest that the lenders take as their profit in consideration of the time given to pay back the loan. It is defined as excess, which results from predetermined interest (sood) which a lender receives over and above the principle (Ras ul Maal)

Riba al-fadl defined as excess compensation without any consideration resulting from a sale of goods. it is applies in the barter trade system which goods are been traded in the same amount but in the different value. For instance, exchange gold with foods.

Why riba is condemned in Islam?

In terms of economic, there will be instability of economic condition caused by the excessive vitality in interest rate, exchange rates and commodity and stock prices. – making the rich become richer and the poor become poorer, because rich persons do not have to do anything as they will get profit from the interest paid by the debtors and the debtors have to work hard to pay back the loan. This will cause injustice and will misuse the others right (11 : 85) , (26 : 183)

Moral – do not think of others liabilities. – will make people lazier because they have done nothing to get their income.

Social – rich get richer – relationship between others might be lost because of the welfare that is not done by the rich person to the poor, Allah has said that we have to protect the poor by eliminating riba and giving zakah (30 : 39) – when muslims eat riba, it will cause muslims to be greed and do not care of others.

Politic – the power of the creditor will be misused because they will violate the power to get what they want (become greedy)and this power will lead to the lost of silaturrahim with others (47 : 22)

Religion – in Islam, we have to protect others right whether the other person is rich or poor – riba will lead us to ‘eat’ others people right (4 : 161) , (9 : 34)


In Islamic terminology is increase or excess over principal or more precisely,it is called a stipulated/forced/obligatory surplus on a debt.Or it can be defined as an increase or excess value (fadl) which in an exchange or sale of a commodity, accrues to the owner (lender) without giving in return any equivalent counter value or iwad.

current scenario..

one of the current crisis is the moral failure and a mismatch between the incentives of various players in the financial arena.

The reason: some of the other elements of the situation described above are partly products of this factor. Currently, financial institutions include banks, investment companies, insurance companies, etc., managed by hired professionals. Those who govern financial conglomerates by virtue of owning enough shares have motives different from ordinary shareholders. Almost the entire population in developed countries is involved in supplying capital through purchase of stocks, bonds, insurance policies, pension funds, etc. While these ‘principals’ are interested in profits they care about many other things too, among them stability, jobs, social justice, and anxiety free communities. Not so the hired managers who consider profit maximization to be their mission as it earns them maximum bonus and continued employment. There are those among middlemen who earn fees. They earn more when transactions multiply. In an environment where no one cares about others, focused as everyone is on his or her own interest, public interest is...
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