ABSTRACT
Getting or paying “interest” on loans is probably the most vehemently and frequently debated subject of Islamic economics. There is no doubt that the Holy Quran forbids riba, but the question is: Does the Holy Quran give a “divine” definition of riba or its scope?
Unfortunately, the Holy Book of Islam, which is the primary source of reference for Muslims, offers no “divine” definitions.
Definitions of riba and its scope are provided by the Ulama or Islamic scholars, whose words are not sacred. They are humans and, therefore, prone to making mistakes or misinterpretations like any other human.
There is scope for new definitions and analyses based on “alternative concepts” with due respect to Islamic values and principles, paving the way for reconsiderations and debates.
In this chapter, the concept of riba will be studied under two headings.
Earned (halal or legal) income, and
Unearned (haram or illegal) income.
We will attempt to present an alternative definition of the concept of “excess,” “surplus,” or “difference,” which is known as “riba” in Islamic finance.
