A Vision of Riba from the Perspective of Secular Science: An Evidence from Russia

Abstract

Nowadays, signing a credit contract is something absolutely trivial, something we do on a daily basis. The fact that certain world religions have outlawed credit (lending money at interest) has no effect on the global positive perception of credit transactions by the public at large. In the Islamic finance industry, the prohibition of lending money at interest is one of the key bans. The great bulk of Russian publications on this subject offer only a theological justification of this prohibition, without giving any secular/scientific substantiation of the prohibition of lending money at interest or, perhaps, on the contrary, of its permissibility. While Russia is willfully heading for establishing an Islamic finance industry, the issue of the secular justification of the inapplicability of credit relations becomes a crucial element of the process. This paper proves the invalidity of credit relations, both through the prism of “sale of money” and of “lease of money”. The paper analyzes the ratio of 1) the benefits from exploiting such invalid (incorrect) relations to 2) the losses from their exploitation. Also, the paper proposes a new format of working capital financing, namely, through the issuance of Islamic promissory notes.