The Objectives of the Prohibition of Riba By: Elhadi Habbani

Compounding Versus Simple Rate:

This theory claims that the prohibited Riba is Riba Al-Jahiliyah which they think it is similar to the compounding interest rate. Alternatively they argue that the simple interest rate calculated and imposed at the time of contract doesn't constitute the prohibited Riba. But this theory has been widely criticized by many scholars and found to be unlawful.

The Theory of Comprehensive Public Need (Al-Hajah):

The propounders of this theory claim that, the comprehensive public need or "Al-Hajah" is acceptable justification to legalize interest or Riba because all the society will benefit. This theory had also been condemned on the ground that the supporters could not specify clearly the Riba which is deliberately prohibited and the Riba which is preventively prohibited.

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