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Encyclopaedia of Ismailism by Mumtaz Ali Tajddin

The word riba comes from the verbal root raba meaning to grow, increase, addition or excess. It refers to an addition over and above the principal sum lent. In economics, it refers to that surplus income, which the lender receives from the borrower, over and above the principal amount as a reward for waiting or parting with the liquid part of his capital for a specific period of time. Riba, in essence, is thus an amount charged on the principal as a consideration for the time during which the principal is to be used and it consists of three elements, viz. addition to the principal, the rate of that addition according to time, and the payment of the additional amount being a condition of the bargain. All transactions including these three elements come under the category of riba.

The first revelation at Mecca denounced usury, yet without prohibiting it reads: "And whatever you lay out at usury (riba), so that it may increase in the property of men, it shall not increase with God; and whatever you give in charity desiring God's pleasure, it is these that shall get manifold" (30:39). This verse does not offer prohibitive injunction. It simply exhorts that the riba does not increase with the God or procure no reward in the hereafter. Tabari in Jami al-Bayan (21:46-48) reports from Ibn Abbas that the riba in this verse means a gift offered by someone to a person with the intention that the latter will give a greater gift to the former. Some commentators have however taken this word to mean usury. This view is attributed to Hasan al-Basri as reported by Ibn Jawji in Za'd al-Masir (Beirut, 1964, 6:304). If the riba in this verse (30:39) is taken to mean usury, which seems more probable, because in other places it carries the same meaning, there is no specific prohibition against it. It emphasized that the riba is not a source of reward from God in the hereafter.

What is meant by riba? The Koran does not define it for the reason that it was a well-known term in Arab society. It is like the prohibition of pork, liquor, gambling, adultery etc., which were prohibited without giving hard and fast definition as all these were well known and there was no ambiguity in their meaning. Similar was the case of riba

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