This is about riba.
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One of our brothers/sisters has asked this question:
Assalamualaikum wa Rehmatullahi wa Barakatuhu,
This is about riba. I had heard something as a very brief note from a welll known scholar of fique but I am in doubt whether what I heard is what he meant. Is there an element of riba in a loan lent if the lender seeks any sort of profit from the loan? If u want me to make this clearer, assume I lend $200 to a friend and I tell him at the time of lending money to return me the $200 in the dinomination of smaller notes......would this scenario involve any element of riba?
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Your Question: Is there an element of riba in a loan lent if the lender seeks any sort of profit from the loan?
If the lender seeks or gets any material benefit whatsoever for his loan, then indeed whatever is received in excess of the principal amount will be definitely considered as ‘riba’.
Your Question: If u want me to make this clearer, assume I lend $200 to a friend and I tell him at the time of lending money to return me the $200 in the dinomination of smaller notes......
If one lends $200.00 and asks the person to return the exact same amount of $200.00 in smaller notes….there is absolutely no harm and it would not be ‘riba’, unless of course in some society the smaller notes (for some reason) hold more value than a larger note, then indeed that would be ‘riba’.
If the nett value of smaller notes and bigger notes in any given society is exactly the same, then returning the amount in smaller notes would not constitute ‘riba’.
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Your brother and well wisher in Islam,