Bank interest is defined as the extra amount that the creditor receives when repaying his debt in exchange for lending him a certain amount to the debtor. An additional amount upon payment, for example, if someone lends another person a sum of money of 100 dirhams, he must have the amount that he will pay when repaying 110 dirhams, for example, 120 or 130. Any additional amount over the original amount is usury, and it is currently called interest.
This type of loan is prohibited in all divine laws, Islamic, Christian and Jewish, because it involves exploitation of people’s needs, blackmailing them and taking their money unlawfully. For him and for his need for which he sought help, it foretells of a hidden baseness in the human soul, a meanness and lowliness that has no limits, and if it spreads in society, the proportion of work and production decreases, and people depend on it and thus a collapse occurs in society, the principle is that work is what requires money to continue Life develops and flourishes, but if money is what brings money, then currency and production among people will stop, which leads to catastrophic consequences.
In addition to that, just as usury and interest are forbidden, so is the exploitation of people in twisted ways, by convincing people that it is from legitimate trade, and robbery of their money unlawfully is also taboo and they are on the same line and level of prohibition, so usury is forbidden because of its exploitation of people’s needs and their difficult circumstances, as well as outrageous profit. It is an exploitation of people’s difficult living conditions, and from here it becomes clear that the halal will be converted to the same degree of usury and will also be transformed into haram because of its climbing on the backs and shoulders of needy people. difference.
As for the types of interest prevalent in our time that banks deal with, they are simple interest and compound interest. Simple interest is calculated by multiplying the loan repayment period by the value of the lender by the percentage of interest, while compound interest is the interest that is compounded or added to the value of the original amount, and it has a special formula To calculate it, this equation takes into account the number of years, the original amount, the number of times of compounding interest in one year, and the interest rate, which gives the value of the amount after the period has passed. It is also worth noting that this relationship is an exponential relationship, and that simple interest is used in limited cases, and that Compound interest is the most widely used.
