Definition Of Riba And Riba In Islam

Source: Financial Islam

Definition of Riba and Riba in Islam:Riba is an Arabic word which literally means ‘increase’ ‘growth’ ‘to rise’ and ‘to become lofty’. From the Shariah (Islamic law) point of view, however, riba technically refers to the ‘premium’ that must be paid by the borrower to the lender along with the principle amount as a condition for the loan or for an extension on its maturity.

Linguistically, riba means, ‘increase’ and ‘growth’. According to Saleh (1986, p. 13), “Riba in its Shariah context, can be defined, as generally agreed, as an unlawful gain derived from the quantitative inequality of the countervalues in any transaction purforting to effect the exchange of two or more species, which belong to the

Definition Bank

Definition bank: Bank is a financial institution that collects society’s surplus cash and gives a part of that cash as loan to investors of craning profit. 

So, bank is an intermediary institution that makes relationship between the owner of surplus savings and the investor of deficit capital. In this process, banks earn profit by receiving interest from the borrowers who want to take short-term and or log-term and or long-term loans and making relatively lower interest payment to take short-term providing their funds for use by the bank.

The Determination Of Exchange Rates

The determination of exchange rates are most popular and essential chapter in foreign exchange rate. Today we will discuss on it.  

Measuring Exchange Rate Movements

An exchange rate measures the worth of 1 currency in units of another currency.

When a currency declines in worth, it's said to depreciate. When it will increase in worth, it's said to understand. On the times when some currencies appreciate whereas others depreciate against the dollar, the dollar is claimed to be “mixed in trading.”