BASICS OF RIBA

The following are the literal meanings of

riba’ EXCEPT ____________.

• to increase

• to growth

• to reduce

• expansion

Which of the following applications is INCORRECT for the types of riba'?

• Riba al-Buyu -selling wheat for barley with similar price on the spot

• Riba al-Fadl - selling wheat for wheat with different weight on the spot

• Riba al-Yad- selling wheat for barley in undetermined time and occasion of receipt

• Riba al-Nasiah - selling wheat for wheat with similar weight and different price in the future

Which of the following illustrates the application of riba in conventional banking?

• Transparent loan payment amount for every month

• Pre-determined penalty for late payment of loan

• Permanent return profit in saving account

• Pre-determined profit charges on loans

Which of the following is FALSE about riba?

• Riba al-Sunnah is also known as 'hidden riba'

• Riba al-Quran is also known as riba al-nasiah

• Any fixed percentage charge (of the initial loan) over and above the initial.

• If the extra charge on a business loan is small, fair and not burdensome, it can be accepted in the name of business cost.

Riba contains the following elements, EXCEPT:

• The loan capital must be cash.

• Determination of surplus is in relation to time.

• Excess or surplus is over and above the loan capital.

• Bargain is conditional on the payment of a pre-determined surplus.