Question- True or False: " There can be no economic preeminence without financial institutions, and no financial institutions without Interest (Riba)" ??
Answer: This is utterly false. There are many Texts in the Quran that contradict this false statement.
Further, the established Islamic economic practices since the time of the Prophet, salla allahu `alaihi wa-sallam, until the present time when banks are widely established, affirm the falsehood of this statement. Muslim economy has always been strong during most of the past fourteen centuries, without relying on banks and certainly without relying on Riba. During this long period of time, the Muslims increased their wealth and had their business transactions duly organized [and fulfilled] for them. In addition, and throughout this time period, many Muslims were able to amass great wealth using the permissible Islamic financial dealings.
Allah gave victory to early Muslim generations over their enemies, until Muslims and the Islamic State became masters of the world, for man y centuries. During theseglo rious centuries, Muslims used to refer to what Allah has revealed for judgment in their rule over Allah’s slaves.
They did not have any need for banks or usury. Rather, if one says that usury and banks were and still are the true causes behind many problems and divisions amongst Muslims and behind the weakness in Muslim economies, the hatred that spread between them and the shattering of the Islamic unity, one will surely be saying the truth. This is because usury causes hatred and enmity between people, eradicates Allah's blessings and warrants His punishment.
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