Shaheed Zulfikar Ali Bhutto Institute of Science & Technology University

ROBOTICS & ARTIFICIAL INTELLIGENCE DEPARTMENT

Total Marks: 04

Obtained Marks:

Islamiat Compulsory
Assignment # 02
Last date of Submission:5 December, Octob2023

Submitted To: Mr Najeeb Hassan Naqvi

Student Name: Shehryar Khan

Reg. Number: 23108237

English BS(AI)-1C SZABIST-ISB

 Shaheed Zulfikar Ali Bhutto Institute of Science & Technology University

ROBOTICS & ARTIFICIAL INTELLIGENCE DEPARTMENT

Instructions: Copied or shown assignments will be marked zero. Late submissions are not
entertained in any case.

Q# What does the term Usury mean in Islam, and why it is forbidden? What
is the penalty of Usury in Islam? Whether is Usury same as Interest? What is
it’s impact on the Economy? Also describe that whether Judaism and
Christianity of the present time support Usury or not?
 Usury:
Usury is derived from the Arabic word Riba which originally means ‘increase’. In Islamic usage
it means ‘an increase in one of the two exchanged items without a compensation to offset this
increase’.
 Usury is Forbidden:
Usury is forbidden, which is clearly stated in the Quran. Allah has said in the Quran strictly that
“Allah has made trade lawful and usury forbidden”
There is also another form of usury , according to most Islamic jurists, which refers to the
simultaneous exchange of goods of unequal quantities or qualities. However, we will be
referring to the practice of charged interest. Usury is prohibited under Sharia law for a couple of
reasons. It is meant to ensure equity in exchange. It is meant to ensure that people can protect
their wealth by making unjust and unequal exchanges illegal. Usury is forbidden under Sharia
law (Islamic religious law) because it is thought to be exploitative. Though Muslims agree that
usury is prohibited, there is much debate over what constitutes riba, whether it is against Sharia
law, or only discouraged, and whether or not it should be punished by people or by Allah.
Depending on the interpretation, Usury may only refer to excessive interest; however, to others,
the whole concept of interest is Usury and thus unlawful.
 Penalty of Usury in Islam:
According to the glorious Qur’an, taking interest is a sin that incurs severe Divine punishment.
The punishment for usury as mentioned in the Qur’an is far more severe than the punishment for
other sins. It is announced in Surah Āli- ‘Imran:

English BS(AI)-1C SZABIST-ISB

 Shaheed Zulfikar Ali Bhutto Institute of Science & Technology University
“O you who believe! Do not devour usury, making it double and redouble and be careful of
(your duty to) Allah, that you may be successful. And guard yourself against the fire that
has been prepared for the unbelievers. (Surah Āli- ‘Imran 3:130-131)
It means that the fury of the fire that is prepared for those who take interest will be just as intense
as the fire prepared for the unbelievers.
 Camparison Between Usury and Interest:

Interest is a percentage fee you pay your lender for a loan, while usury is the act of charging
excessive interest rates that are unfair to borrowers. Interest is a fair and regulated practice, but
there are legal consequences to committing usury. Islam prohibited all kinds of pre-determined
rates of interest whether the loan is for consumption or for productive purposes. Islam says that the
principal amount of loan should be protected and any amount other than the principal is strictly
prohibited. The lender has no legal and moral right to claim a fixed rate of interest on loans
advanced even for productive purposes. When a loan is given without sharing the risk, any
additional payment, small or large, in excess of the principal amount of the loan, constitute
interest/riba and as such is prohibited by the Holy Quran.
 The Impact of Interest on the Economy:
According to the classical economists, there is a reward for the amount of saving in the shape of
interest. The higher is the rate of interest the larger the premium for savings and vice versa. They
then tried to link saving and investment. An increase in savings means an increase in the volume of
investment in a country, they argued. But they ignored that an increase in the rate of interest means
an increase in the cost of investment which will adversely affect the total investment in the country.
Rather, there is direct relationship between saving and income (Y) of the people because savings
(S) and consumption (C) as well as induced investment (I) depends on income. If income increases
savings increases. If there is no interest, the amount of savings will be available for investment
with zero cost and the rate of investment will increase and the economy will take off based on
Musharakah and Mudarabah modes of
finance both. It is basically the rate of investment that influences positively the total income of the
people which ultimately enhances the ability of the people to save more. This is how one can
explain the enormous increase in savings during the present century in-spite of a
steep fall in the rate of interest. Another adverse impact of interest on the economy may be in the
shape of increase in debt and debt servicing in the country concerned. It is generally agreed

upon that foreign loans play a crucial role in the economic development of the recipient country.
English BS(AI)-1C SZABIST-ISB
 Shaheed Zulfikar Ali Bhutto Institute of Science & Technology University
However, it should also to be kept in mind that a loan taken by the poor country on a high price
(high rate of interest) will rather increase the total amount of loan and
will make difficult the repayment of installments of the debt.
 Judaism and Christianity point of view on Usury:
NO DENOMINATION of the Christian Church has ever condoned usury, which we might define
as an extortionate charge for the use of money or fungible goods, but the charging of interest is no
longer regarded as usury in all circumstances. In Judaism, the Torah (the Hebrew name of the Law
of Moses or the Pentateuch, the first five books of the Old Testament) prohibited usury amongst the
Jews, while at least one authority sees in the Talmud (the oral law which supplements the written
scriptures for orthodox Jews) a consistent bias against the appearance. Judaism condemns usury
towards Jews, but allows it towards non-Jews.
 Plagiarism Report:

English BS(AI)-1C SZABIST-ISB