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Philosophy and Fundamentals of Sharī’ah for Islamic Finance
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Thus, the long list of ribā al-qarḍ makes it the most popular
practices denounced by Sharī’ah. The idea behind the prohibition
of ribā al-qarḍ in particular and other type of ribā is to
avoid any oppressive conduct that deters the borrowers who
are in need of money. On this score loan contract in Islām is
categorised as gratuitous contract as it is meant to help those in
need of money.

Sale-Based Ribā (Ribā al-Buyū’)

Guidance on the ribā al-buyū’ is derived from the Hadīth reported by Abdullah
bin Ṣāmit:

Prophet SAW said:
“Gold for gold, silver for silver, wheat for wheat, barley for barley, dates for dates
and salt for salt, like for like, equal for equal, and hand-to-hand. If the commodities
differ, then you may sell as you wish provided that (the exchange) is hand-to-hand”.

(Ṣaḥīḥ Muslim)

From the principles of Islamic jurisprudence perspective, the Hadīth
indicated elements that represent the effective cause (‘illah) of
the prohibition of ribā in the contract of exchange. These two effective
causes are:

a. Deferment of the counter value in term of time; and

b. Different measurements of the counter value of similar ribawi
items.

Based on these two elements as indicated in the Hadīth, scholars
classify ribā:

a. Ribā al-Nasī’ah: Ribā by virtue of deferment in time of counter
values (ribawi item) that belong to:

i. the same basis/genus (jins) and same kind (nau’) eg:
gold and gold; or

ii. the same basis/genus (jins) and different kind (nau’)
eg: gold and silver.
b. Ribā al-Faḍl: Ribā by virtues of excess of one of the counter
values (ribawi items) that falls under the same basis/genus
(jins) and same kind (nau’).

Ilustration for Ribā al-Nasī’ah and Ribā al-Faḍl:

• If one buys gold in exchange for gold, then the exchange must
be at equal measurement and spot payment. Should the equal
measurement is lacking, the transaction tantamount to ribā
al-faḍl. On the other hand, should the spot payment is lacking
the transaction tantamount to ribā al-nasī’ah.