1- In pre-Islamic days Riba was prohibited in all ancient philosophies and religions.
2- The concept of money lending at interest was started when the society switched over from barter system to monetary system.
3- Aristotle, a Greek philosopher rejected the concept of money lending at interest on the basis of the logic that a piece of paper can not be get another piece of paper and stressed that the sole natural object of the creation of money is to facilitate the change i.e. money is a medium of exchange and store of value. He declared money as sterile and compared it with a barren hen, which lays no eggs.
4- Plato too condemned interest.
5- In 340 BC Lex Genucia prohibited interest in the republic of Rome.
6- In Biblical times all payments for the use of money were forbidden. When the Roman Empire was Christianize d, in the 4th century, the church forbid clergy from money lending at interest.
7- The teaching of Jesus on the subject are very clear, "Love your enemies and do good, lend, and expect nothing in return."
8- The chargign of interest has also been prohibited in Judaism. it says, "if you lend money to any of my people who is poor you shall be to him as a creditor and you shall not exist interest to him.
9- It is interesting to note that in AD 605; just before the dawn of Islam, on a tempestuous day, a spark of fire caught the curtains of Ka, ba (House of God in Makkah) resulting in serious damages to the building. For the repair and reconstruction of the building, contributions were asked from the general public living in the locality. It was, however, solemnly announced that for the Holy building, only pure, clean and honestly earned money should be donated; prostitutes and usurious people were specifically debarred from contributing anything. It is , therefore, obvious that even among the pagans of Arabia, in the dark days of civilization, usury and interest was considered to be the money earned by unethical means.
10- The end of thirteenth century saw the decline of the influence of Orthodox Church and the rise of secular powers. As a result, the charging of interest which was forbidden by the church gradually started being tolerated. In the Mercantile Era (1550-1700) money began to be used on la large scale for commercial transactions and assumed the role of production like land, and interest on capital was equated to the payment for renting money similar to the rent of land.
11- In 1740, the city of Verona, issued a bond at 4% interest, which led to a lot of controversies. The Benedict XIV wrote to the bishop of Italy, firmly emphasizing that it was a sin to take profit beyond the principal amount given as loan. He specifically condemned various pleas such as profit on lean was moderate or that loan was given to a rich person or that it was to be used for production purposes. (Gul, 1992)
12- In this connection, it is significant to note that after the establishment of political supremacy of Islam over a greater part of the world, the prohibition of usury or interest which was also considered as undesirable among non-Muslims was enforced more strictly. The prohibition of Riba, usury or interest, by Islam is, therefore, nothing new. Islam allows profits through trade but prohibits interest because of the negative effects of the fixed interest-bearing loans.
2- The concept of money lending at interest was started when the society switched over from barter system to monetary system.
3- Aristotle, a Greek philosopher rejected the concept of money lending at interest on the basis of the logic that a piece of paper can not be get another piece of paper and stressed that the sole natural object of the creation of money is to facilitate the change i.e. money is a medium of exchange and store of value. He declared money as sterile and compared it with a barren hen, which lays no eggs.
4- Plato too condemned interest.
5- In 340 BC Lex Genucia prohibited interest in the republic of Rome.
6- In Biblical times all payments for the use of money were forbidden. When the Roman Empire was Christianize d, in the 4th century, the church forbid clergy from money lending at interest.
7- The teaching of Jesus on the subject are very clear, "Love your enemies and do good, lend, and expect nothing in return."
8- The chargign of interest has also been prohibited in Judaism. it says, "if you lend money to any of my people who is poor you shall be to him as a creditor and you shall not exist interest to him.
9- It is interesting to note that in AD 605; just before the dawn of Islam, on a tempestuous day, a spark of fire caught the curtains of Ka, ba (House of God in Makkah) resulting in serious damages to the building. For the repair and reconstruction of the building, contributions were asked from the general public living in the locality. It was, however, solemnly announced that for the Holy building, only pure, clean and honestly earned money should be donated; prostitutes and usurious people were specifically debarred from contributing anything. It is , therefore, obvious that even among the pagans of Arabia, in the dark days of civilization, usury and interest was considered to be the money earned by unethical means.
10- The end of thirteenth century saw the decline of the influence of Orthodox Church and the rise of secular powers. As a result, the charging of interest which was forbidden by the church gradually started being tolerated. In the Mercantile Era (1550-1700) money began to be used on la large scale for commercial transactions and assumed the role of production like land, and interest on capital was equated to the payment for renting money similar to the rent of land.
11- In 1740, the city of Verona, issued a bond at 4% interest, which led to a lot of controversies. The Benedict XIV wrote to the bishop of Italy, firmly emphasizing that it was a sin to take profit beyond the principal amount given as loan. He specifically condemned various pleas such as profit on lean was moderate or that loan was given to a rich person or that it was to be used for production purposes. (Gul, 1992)
12- In this connection, it is significant to note that after the establishment of political supremacy of Islam over a greater part of the world, the prohibition of usury or interest which was also considered as undesirable among non-Muslims was enforced more strictly. The prohibition of Riba, usury or interest, by Islam is, therefore, nothing new. Islam allows profits through trade but prohibits interest because of the negative effects of the fixed interest-bearing loans.