Fakhrul Haziq Bin Mohd Setia (1713549)

SHA 2628(Transactions in Islamic Law 2)

“Allah has permitted trade and has forbidden interest” (2:275)

The act of trade has been rooted for a long period of time in which it also has been existed as
an integral part of human conduct. Trading between the people in a community can be regarded as an
important act because it sustains the community to develop and prosper. This act also has been
recognized by Allah in the revealed verse in which on his permission the act of trade is permissible
and accounted as an interaction between human being. As for that, it can be regarded that it is a fitra
for human being to carry out the act of trading for the way of trading it can sustains the daily of life
for a person. The act of trading also from a different viewpoint can be categorized as an ibadah in
which we will be rewarded and as an act of servant as the act purposely for the benefit of oneself and
other human being. The act will be accountable as an ibadah as long as it is in the boundary of shariah
which strictly following the Islamic law and will be fall into haram if it is involving the matters that
prohibited by shariah. Therefore, each Muslim that proceeds in trading in his daily lives must observe
his conduct with the guidance of the knowledge on the shariah rulings in trading for not befall himself
into trading that is prohibited in Islam.

In the same verse, after the permissibility of trade by Allah, He puts prohibition on the riba’ in
which showing that it is strictly prohibited by the accordance meaning. Income that was generated
from riba’ is not permissible in islam and it is sinful for a Muslim to procure it. The definition of riba’
in the regular sense is commonly known as usury in which the profit came from the extension of
giving loan and it serves as interest which burdening the debtor. Although in Islam the affair of debt is
permissible in Islam, it is prohibited from taking any interest from the service of giving the loan. This
is because the act of charging interest for loan will increase the amount debt and consequently oppress
the debtor with the amount that he loans initially. For that reason, Islam as a religion that promote
justice and virtue prohibits this type of transaction as it is against the core values that embedded in
Islamic spirit. Therefore, usury is strictly prohibited under the religion of Islam for its inherent nature
that is oppressive and injustice toward the desperate and poor people.

In the area of trade and usury, Allah has set the legal rulings clearly in which binding to all
muslims and must be followed to ensure the muamalah between in the community to be peaceful and
harmony to be living in.