Riba In Secured Loans For Consumables
Also, if something is priced and exchange is based on fair and open market, then it doesn’t become Zulum or Riba in most cases. But, still, if we charge someone based on fair market, but take advantage of their dire situation (a situation that is life threatening; food, housing, clothing, medical need), it is still Riba. An exchange for a tangible to a tangible asset is not interest. The exchange of money for more money is interest; even if the payment is secured by a physical object.
Human rights are the international social contracts. Regardless, fine i agree with the broader definition of injustice that any violation of human rights is injustice. Riba is a specific sin that leads to eating of others money unlawfully. however it does not fall under our obligation to feed the hungry, helping people in need by charity or loan etc. that are all our obligations.
I agree with everything, except that money can’t be rented at a fixed amount of return even if it is below the profit amount. It is not right. It is an interest. The lender if not actively participating in running the business or involved in key decision making, then he should demand a larger portion of profit sharing and lesser portion of loss taking when business goes down. For example, a lender may contributes 25% capital in a business for a mutually agreed lease period as a silent partner, then he may ask for 30% of yearly profit and only 10% of business loss on his principal in case business goes down.
I am actually fine with both fix amount or fixed share as profit sharing formula. My question on what basis you believe fixed amount of profit share is not a fair or legitimate agreement between the partners? I am trying to figure out the injustice or the sin in there. If we can’t find any such thing we cannot label it as haram. We can say it’s a bad negotiation for one of the party but as long as it’s done with free consent and as per the custom of trade – no one can doubt its legitimacy. Re stocks i agree with you the shareholder get their money back in the last. I also agree that in most cases they don’t get much against their shares in case of bankruptcy. Lets assume a co pa y go bust as it fails to pay its creditors on time. Later when real estate of the company is sold it generates enough money to everyone. Are you saying in case of a bankruptcy, where shareholders get their full money back, the dividend income they have been earning on their investment was a Riba? If not how can interest earned on loans to the same company be riba?