Ikatan Ahli Ekonomi Islam

RIBA AND ISLAMIC BANKING By: Abu Umar Faruq Ahmad; M. Kabir Hassan;  Ust. Sofyan Kaoy Umar (Editor) Abstract   The Prophet admonished riba in its all forms in his farewell Pilgrimage speech. The article examines the principles of riba and how it fits within the realm of Islamic economics, as it is exemplified by the Prophet in his Sunnah and as it is described in the Holy Qur’an. Consecutive verses of the Qur’an and its interpretations through the hadiths of Prophet are also portrayed in the article. Referring to a debate saying the modernists claim that what is prohibited in al-Qur’an is the form of riba referred to the then prevailing practice of lending in the pre-Islamic era, the authors boldly ruled out the logic saying that any increase over and above the principal should be riba, and as such it is unlawful. The modernists also raised some debatable issues like-‘difference between riba and usury’ and ‘individual and institutional riba’. All these claims are defeated wit