Thursday, January 12, 2017

Islamic finance in Europe (22)

Continuation
KEY PROHIBITIONS
THE PROHIBITION OF RIBA
The author writes:
In the Quran, there are several verses that condemn riba.
The riba literally means “increase, addition, and surplus”.
These originate from a pre-Islamic practice.
At that time, the amount due was doubled if the debtor proved unable to repay the debt at maturity.
The scope of riba’ has been debated since the early days of Islam.
The fundamental problem is finding a consensus on the scope of the “interest rate”.
This is usually considered to be either:
§  an unjustified increase;
§  or a surplus gain.
From the research paper of European Central Bank

(Authors: F.Mauro, P.Caristi, S.Couderc, A.D.Maria, L.Ho, B.K.Grewal, S.Masciantonio, S. Ongena and S.Zaher)

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