Almost 800 years before St. Thomas Aquinas and John Calvin were researching ways to resolve the prohibition of charging interest as taught by Moses (pp) and Jesus (pp) to accommodate the needs for financing of the growing commercial business, Muslim traders were practicing RF financing to address the financing of the capital needs of Muslims and non-Muslims that are necessary to help in the growth of their trading and commercial activities. The RF finance system and code for financing of commercial transactions needed by Muslim traders and merchants and the non-Muslims who dealt with them was conducted in India, China, central Asian countries, the Middle East, and some European countries. The RF financing rules and codes were based on the Judeo-Christian-Islamic Shari'aa law. This law finalized and detailed RF financing rules, and it was popularized based on revelations of the Qur'aan, which inculcated all God's messages from the Torah and the Gospel when it was revealed between the years 611 and 634 (approximately).

The Development of the Universal RF System in Islam

There is an important fundamental red line in the teachings of Islam — the line that separates what is divinely permissible, called halal, and what is divinely not permissible, called haram. Every Muslim is trained by his/her parents — regardless of the level of their religiosity — to know these two most important words in the vocabulary of Islam from childhood. It suffices for a mother to tell her child that lying is haram, because the child is trained to know the divine consequences of committing that haram act. These divisions can be called the basis of the Judeo-Christian-lslamic law. Using this concept, one can state that riba is haram. The Qur'aan reveals:

3:130 О ye who believe! Devour not usury, doubled and multiplied; but fear God that ye may (really) prosper.

4:161 that they took usury, though they were forbidden; and that they devoured men's substance wrongfully; we have prepared for those among them who reject faith a grievous punishment.

Charging riba was described as one of the worst and most grievous sins, as reported in the Hadeeth (pronouncement) of Prophet Muhammad (pp) that describes “the seven most despicable sins.” The Prophet (pp) also was reported to have said that dealing in riba is like committing murder.[1]

The following discussion presents a stepwise development (by the author) that will help in understanding the structure of the RF system.

  • [1] This was reported by Bukhari, Muslim, and others.
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