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"Those who take riba (usury or interest) will not stand but as stands the one whom the demon has driven crazy by his touch. That is because they have said: "Trading is but like riba." And Allah has permitted trading, and prohibited riba. So, whoever receives an advice from his Lord and stops, he is allowed what has passed, and his matter is upto Allah. And the ones who revert back, those are the people of Fire. There they remain for ever.
Allah destroys riba and nourishes charities. And Allah does not like any sinful disbeliever. Surely those who believe and do good deeds, establish Salah and Zakah have their reward with their Lord, and there is no fear for them, nor shall they grieve.
O those who believe, fear Allah and give up what still remains of the 'riba' if you are believers. But if you do not, then listen to the declaration of war from Allah and His Messenger. And if you repent, yours is your principal. Neither you wrong, nor be wronged.
And if there be one in misery, then deferment till ease. And that you leave it as alms is far better for you, if you really know. And be fearful of a day when you shall be returned to Allah, then everybody shall be paid, in full, what he has earned. And they shall not be wronged." (2:275-281)
The Prohibition Of Riba (Usury)
From these verses begins the description of the forbiddance of riba and the injunctions relating to its unlawfulness. This issue is very important from different angles. On the one hand, there are the severe warnings of the Qur'an and Sunnah and on the other, it has been taken today as an integral part of the world economy. The desired liberation from it seems to be infested with difficulties. The problem is very detail-oriented and has to be taken up in all possible aspects.
First of all we have to deliberate into the correct interpretation of these verses of the Qur'an and into what has been said in authentic ahadith and then determine what riba is in the terminology of the Qur'an and Sunnah, what transactions it covers, what is the underlying wisdom behind its prohibition and what sort of harm it brings to society.
The second aspect of riba is intellectual and economic. Is it true that riba guarantees the economic development of the world, so much so, that its suspension will categorically result in the destruction of trade and general economic activity? Or, this whole evil cycle is nothing but the brain-child of those heedless of Allah Almighty and the Hereafter. Otherwise, all economic problems can be solved without it as well. Going a step further, we can even say that the economic peace in the world depends on the elimination of riba, let alone the resolution of its problems. Riba is the greatest cause of the economic maladies of the world.
This second aspect involves the discussion of an economic problem under which come long debates which are not related to the interpretation of the Qur'an, therefore, we shall restrict ourselves to dealing with the first aspect only, which requires no less details either.
Here we have a total of six verses which state the prohibition of riba and set forth related injunctions. Out of these, the first sentence of the first verse points out to the sad end of those involved in riba transactions and to the disgraceful and dishevelled nature of their rising on the day of resurrection. It is said that those who consume riba do not stand except like a man who has been driven crazy by the embrace of some satan or jinn. It appears in hadith that the word, la yaqumuna or 'do not stand' means the rising of the dead from their graves on the day of resurrection in the sense that the dealer in riba, when he rises from his grave, will rise like the mad man who has been driven crazy by some satan or jinn.
The first thing we find out from this sentence is that a human being can faint or go mad under the influence of jinns and satans and the observations of those who have had such experience prove it. Hafiz Ibn Qaiyyim al-Jawziyyah Rahmatullahi 'Alayh: Allah have mercy upon him has confirmed that physicians and philosophers have conceded that epilepsy, fainting or madness are caused by several different reasons, one of which, at times, could also be the input of jinns and satans. Those who reject this have no other argument in their favour except that obviously it is too far out to believe.
The second point to be noted here is that the Qur'an does not say that the consumers of riba will rise in a state of madness or insanity. Instead, it refers to a peculiar condition of lunacy or fit or stupefaction - as if someone has been embraced by Satan and driven crazy. Perhaps, this carries the hint that a person struck with lunacy or fit is, at times, found inactive and silent while usually these people will not be found in that dormant state. Instead, they would be identified by their ranting, raving and crazy doings as a result of the satanic touch.
Perhaps, there might be yet another hint here. It is commonly noticed that human senses come to a flat nothing after fainting or insanity following a sickness; the very feeling of pain or punishment is just not there. But these people will not be found in that inert state. On the contrary, they would feel, with full sensitivity, the pain and the punishment like one shadowed by-a demon.
Now, at this point, we have to look for a certain compatibility in crime and punishment. When punishment comes from Allah Almighty, for a person or group, against a certain crime, it is certainly appropriate to the crime. Therefore, raising the consumers of riba, without sense, on the day of resurrection is perhaps indicative of a certain parallelism. Isn't it that the consumer of riba is so drunk with his greed for money that he is neither kind to anyone poor, nor does he blush before anyone for what he does? Since he was really senseless during his lifetime in the world, he was raised on the day of resurrection in that same condition. Or, may be, he was so punished because, in the mortal world, he demonstrated his lack of reason as reason, that is, he declared riba to be like trade; therefore, he was made to rise all deprived of his sanity.
Also noteworthy here is the fact that the verse uses the expression ya'kuluna or 'eating' of riba and, by application, means the taking and using of riba. This may be in eating or clothing or housing and its furnishings. But, it was identified with the act of 'eating' because that which is eaten cannot possibly be retrieved, contrary to other type of uses where things can be taken back. Therefore, total possession and monopoly are expressed through the word, 'eating'. This metaphor is found, not only in the Arabic language, but in Urdu, Persian and several other languages (English: 'eat', or the stronger word, 'devour').
After that, comes the second sentence, in which, giving the reason for this punishment of the consumers of riba, it has been said that these people have committed two crimes. One: They consumed the prohibited (haram) by dealing in riba. Two: They took it to be lawful (halal) and, in reply to those who declared it to be haram, they said that buying and selling is very much like riba. Just as 'profit' is derived from riba, so is profit derived from buying and selling. If riba is haram, trade should be haram too, although it is not prohibited in the sight of anyone.
Here, given the dictates of the situation, they might have said that riba is also like trade so, when trade is halal, riba should be halal too. But they, by changing the style of their statement, took a sort of mocking plunge at those who said that riba was haram, thereby telling them in effect - 'if you say riba is haram, then you must say that trade is also haram'.
In the third sentence, in reply to what these people said, Allah Almighty negated their position by saying that these people regard riba as equal to trade, although there is a world of difference between the two in accordance with the will and command of Allah Almighty. When He has made the one halal and the other, haram - how could they be equal?
Keeping this reply in mind, we should note that the objection raised by those people (the defenders of riba) was based on a purely rational argument. They were simply saying that since both activities aimed at earning profit, their governing injunction should also be one and the same. Praise be to Allah Almighty that He did not answer their rational doubt by a parallel rational explanation. Rather on the contrary, answering in His wisdom, He said that Allah Almighty is the absolute, sovereign master of all and He alone knows the harm and benefit, the good and bad of everything, most comprehensively. When He declares something to be halal, and something else to be haram, you should immediately realize that there must be some loss or harm or evil in that which has been declared haram, even if one does or does not see through it. This is because the actual reality of this whole system, and the benefit and harm that lies therein, can only be encompassed by the same 'Alim (the Knower) and Khabir (the Aware), from Whose reach of knowledge the minutest particle of the world cannot escape. The individuals or groups in this world can identify their expedient gains and their losses, but they just cannot claim to have encompassed the entire range of benefits and harms affecting the whole wide world. There are things that appear to be beneficial for a certain person or group but, when looked at in the perspective of the whole nation or country, the same things prove to be harmful.
Following that, it is said in the third sentence that a person, who had collected some money before riba was declared haram, and who repented after riba was declared haram, and promised to himself that he would not go near it in the future, he then, will find that the amount so collected belonged to him based on the outward dictate of the Shari'ah. Now remains the inward affair, that of his sincere, heart-felt abstinence, or that of his possible hypocritical repentance, that will be retired as a matter between him and His Lord. If the repentance comes from the heart, it will be beneficial in the sight of Allah, otherwise it will pass into nothingness. Common people have no right to doubt about it. However, one who hears good counsel, yet elects to revert to the same erroneous pattern of word and deed, for such people Hell is the place to go since this act of eating riba is a sin. And since their saying, that riba is halal like trade, is kufr, they will, for that reason, live in Hell for ever.
In the second verse (276), it was said that Allah Almighty eradicates riba and lets sadaqdt (charities) grow. Here sadaqat were introduced with riba by virtue of a unique congruity. It will be noted that there is contradiction in the very nature of riba and sadaqah, then their outcomes are also contradictory, and generally, those who engage in these two have contradictory intentions and objectives.
The contradiction in nature can be explained by the fact that in sadaqah one gives to others what belongs to him without any reward or return, while in riba, that which belongs to others is taken without any compensation or return. The intention and the objective of those who are engaged in these two activities is contradictory because one who gives sadaqah elects to lessen or exhaust what belongs to him exclusively for seeking the pleasure of Allah Almighty and for earning merit in the Hereafter; while the riba-taker is eager to collect impermissible increase on the capital he already has. That the outcome of both is contradictory is made clear by this verse which says that Allah Almighty erases the gains obtained through riba or takes away its barakah (blissful abundance); and increases the wealth, or its barakah for the giver of sadaqah. The result is that the objective of the greedy in pursuit of wealth is not achieved, while one who spends in the way of Allah, and who was quite happy with a little decrease in his belongings, finds it full of Divine barakah whereby his wealth increases, or its end-products do, and their benefits accumulate.
At this point, it may be interesting to find out what is the meaning of erasing riba and increasing sadaqat in the verse. Some commentators have said that this erasing and increasing relates to the Hereafter where the riba-consumer will find his wealth of no avail; it might as well become a curse for him; while those who are engaged in acts of sadaqah and khayrat will find that their wealth has become a source of eternal blessings. This is absolutely obvious in which there is no doubt. However, according to the consensus of commentators, the position is that the erasing of riba and the increasing of sadaqah is most certainly related to the Hereafter, but some of its traces are observed in this world as well.
The money or property of which riba becomes a part is sometimes destroyed taking with it all that was before it. This is a common sight in markets of riba and stocks where millionaires and capitalists of yesterday become insolvents and paupers of today. No doubt, there are chances of profit and loss in riba-free business activities and there are many businessmen who face losses in business deals but a loss that turns a millionaire into a beggar is witnessed only in riba markets and stock exchanges. There are so many statements of the experienced and the knowledgeable which say that the wealth collected through riba may increase faster and higher, but it generally does not survive long enough to run through children and their successors. In between, comes some calamity and effaces everything out. Sayyidna Ma'mar said that they have heard from their elders that forty years hardly pass on the riba-consumer when muhaq (major loss) overtakes his wealth.
May be, the wealth or property does not go to ruins outwardly, but this much is quite certain that its benefits, utilities, and blessings will go away. Since this is no secret that gold and silver are not desirable or useful as such. They cannot remove hunger or thirst. They cannot help beat the heat or serve as quilt and wrap in winter. Neither can they be used as clothes or utensils. The only purpose for which a wise person goes through thousands of exercises to procure and secure these can hardly be anything else except that gold and silver are means to procure things that go to make man's life pleasant and that he may live a life of comfort and self-respect. Then comes man's natural wish that his children and relatives should also enjoy the same comfort and self-respect as he did.
These are the sort of things that can be called the benefits and utilities of wealth and property. As a result, we can safely say that one who procures these benefits and utilities has his wealth increased in a sense, even though it may appear to have decreased, and one who procures these benefits and utilities on a lower scale has his wealth decreased in a sense even though it may appear to have increased.
After having understood this, let us compare the two activities of riba dealings and sadaqah and khayrat. It will soon be noticed that the wealth of the riba-consumer, no doubt, appears to be increasing, but that increase is akin to the swelling of the human body. The increase in swelling is after all an increase of the body itself. But no sane person would like to have this sort of increase because he knows that this increase is a certain knock of death. Similarly, no matter how increased is the wealth of the riba-consumer, he remains, for ever, deprived of its fruits, that is, comfort and honour.
Perhaps, at this point, a doubt may bother someone in view of the comfort and status enjoyed by the riba-consumers of today. Here they are with their mansions and villas, living in every luxury money can buy, attended by servants and maids, having the best to eat, drink and sleep - necessities and absurdities all rolled in one. A little thought here would lead every sane person to differentiate between the articles of comfort and comfort itself. There is a big difference between the two. The articles of comfort are made in factories and sold in markets. These can be procured aginst gold and silver, but that which is known as comfort, peace and bliss, is neither made in any factory nor sold in any market. This is mercy (rahmah) which comes directly from Allah Almighty. There are occasions when this cannot be procured no matter how much one holds in his possession. Just think of the comfort of a sound sleep. In order to have it, we can certainly do our best - make a sleep-oriented house which is the best possible, perfect arrangement of air and light, cooling, heating, handsome looking furniture, the bed, the mattress, the pillows, all chosen ideally - but can we be sure that sleep will come just because all this helpful paraphernalia is there? If you have never personally experienced this, there are thousands who cannot sleep due to some disease, and who would say no. Reports from a country, so wealthy and 'civilized' as USA, reveal that seventy per cent people cannot sleep without sleeping pills. There are times when even these do not work. You can buy from stores things to make you sleep but you cannot buy sleep from any store at any price. Similar is the case of other articles of comfort and enjoyment. You can buy these articles against money but it is not necessary that you do experience comfort and enjoyment.
Again, after having understood this, if we look closely at what happens to the consumers of riba, we shall find that they have everything in the world except what we know as real peace and comfort. So intoxicated they are in turning their ten million into fifteen and fifteen into twenty that they have no time to eat, or dress up, or be with their wives and children. There are factories to take care of. There are foreign ships to watch. Anxieties after anxieties chase them day and night. With them they sleep and with them they rise. How terrible of these crazy people who have confused comfort with articles of comfort, and therefore, they are far far away from it.
This is a view of their so-called 'comfort'. Now let us think of their ideas of status, prestige and fair name. The fact is that such people become hard-hearted and merciless. Taking advantage of the poverty of the poor and the low income of the low-income people becomes their very occupation. Like parasites, they suck their blood to feed their own bodies. Since that is that, it is just not possible that people will ever respect them. Revealing are the accounts of the money-lenders of India and the Jews of Syria. If you see them as they are, you will find that their coffers are filled with gold and silver and precious stones yet they are given no respect in any group of human beings in any corner of the world. Moreover, the inevitable outcome of this cruel practice of theirs is that the poor start grudging and hating them, so much so that in the world of today most wars are an expression of this grudge and hate. It is the confrontation between labour and capital that introduced the ideologies of socialism and communism in the world. The subversive activities of communism are a result of this grudge and hate. The whole world has become a burning cauldron of killings and confrontations because of these. This much accounts for their personal comfort and social prestige.
Experience bears out that riba-earnings never make even the life of their children pleasant. Either the earnings go to waste or, because of its curse, they too, remain disgraced and deprived of the real fruits of wealth. People may perhaps be deceived by the example of the riba-consumers of the West, wondering how rich they all are and how do their next and their next generations flourish. To this, I have already answered by presenting a brief outline of their so-called prosperity.
Here it can only be added that they really are like some man-eater who nurses his body by feeding on the blood of other human beings, and then a group of some such people go to live in a community of their own, and you take someone to that locality to show him how healthy and prosperous all of them happen to be. But an intelligent visitor who is interested in the welfare of humanity will never want to limit his visit to this locality alone; on the contrary, he would also want to see those localities where the blood of people has been sucked dry leaving them half dead. One who has seen the totality of such localities can never be happy with the locality of fat man-eaters. He can never say that this act of theirs is the way of human progress; on the contrary, he will have no option but to declare this as destruction of all that is human.
Set against this is the case of those who give sadaqah and khayrat. You will never find them running after money so anxiously. They may have lesser articles of comfort but they shall be found having more satisfaction and peace of heart, which is real comfort, as compared to those who have all those supporting articles. Consequently, they shall be looked at with respect and admiration by every human being of the world.
Allah destroys riba and nourishes charities.
In short, the above statement of the verse is very clear in relation to the Hereafter. However, if we wish to understand, with a little effort, it is equally open in respect of this worldly life. This is what is meant by the hadith in which the Holy Prophet Sallallahu 'Alayhi Wasallam: Peace be upon him said: 'No matter how much riba increases, it will decrease ultimately.' (Musnad Ahmad and Ibn Majah)
At the end of the verse (276), it is said: Allah Almighty does not like any disbeliever, any sinner. Here it has been indicated that those who just do not hold riba as haram have fallen into kufr (disbelief); and those who do know it to be haram, yet get involved with it, are sinners, transgressors or fasiq.
The third verse (277) mentions the great reward of peace and comfort that awaits the truly believing and practising Muslims, who are steadfast in Salah and Zakah. Since, in the verse previous to this, the punishment of Hell and the disgrace the consumers of riba will be facing was mentioned, so in accordance with the general style of the noble Qur'an, the merit - in Akhirah - of the believing-practising Muslims, those steadfast in Salah and Zakah, was mentioned alongside.
The gist of the fourth verse (278): "O those who believe, fear Allah and give up what still remains of the riba if you are believers" is that, after the revelation that prohibited riba, the giving and taking of the amount of riba that remained due against anyone was also prohibited.
Explaining this, it can be said that riba was rampant all over Arabia before it was prohibited by revelation. When verses earlier than the present one brought forth its prohibition, Muslims - following their Qur'an-oriented habit - abandoned all their riba-related dealings. But some people had claims of unpaid riba amounts on some others. In that connection, it so happened that Banu Thaqif and Banu Makhzum, two Arab tribes, had mutual riba dealings and people from Banu Thaqif had claims of unpaid riba amounts against Banu Makhzum. When Banu Makhzum became Muslims they, after having made their commitment to Islam, thought it to be impermissible to pay back the amount of riba due. On the other side were Banu Thaqif; their people started pressing their claim. Since these people had become Muslims, but did have a mutual peace agreement, the people of Banu Makhzum told them that they had now entered the fold of Islam and had no intention of spending their Islamic earnings in paying off riba.
This dispute rose in Makkah. That was a time after the conquest of Makkah. Sayyidna Mu'adh Radhi-Allahu Anh: Allah be pleased with him (according to another report, Sayyidna 'Attab ibn 'Asid Radhi-Allahu Anh: Allah be pleased with him was the Amir of Makkah, governor of the city, appointed by the Holy Prophet Sallallahu 'Alayhi Wasallam: Peace be upon him. He reported this dispute in writing to him requesting his guidance. It was in this background that this verse of the Qur'an was revealed, the gist of which is that all previous dealings involving riba should be terminated after entry into the fold of Islam, also no previous riba amount should be realized. The principal was all that could be taken.
When this Islamic law was enforced, the Muslims were already bound by it. The non-Muslim tribes who had accepted the Islamic law as party in peace treaties, they too, were bound by it. But, in spite of this, when the Holy Prophet Sallallahu 'Alayhi Wasallam: Peace be upon him announced this law in his famous Address of the Last Hajj (), he made it a point to say that this law does not carry behind it the financial interest of any individual, or nation, or Muslims themselves. This has been brought into force to reconstruct, reform and better the whole humanity. Therefore, first of all, we let go large amounts of riba owed by non-Muslims to Muslims. Now they too should have no excuse in leaving off the amount of riba they claimed. As he said in his Address: which means that the riba content of all riba dealings made in the age of ignorance stood forsaken. Now everyone will get the principal and no one will get the extra amount of riba. 'Neither shall you be able to do injustice to anyone by charging an increased amount, nor shall anyone be able to do injustice to you by decreasing the amount of your principal.' And the first riba that was surrendered was the riba of Sayyidna 'Abbas ibn 'Abd al-Muttalib Radhi-Allahu Anh: Allah be pleased with him, large amounts of which were due on non-Muslims in the form of Riba. The subject verse refers to this happening and sets out the injunction to leave off all standing riba amounts.
As the verse opens addressed to Muslims, they were first given the command of that is, 'fear Allah.' Given after that was the injunction covering the real issue. This is the same unique style of the Qur'an which distinguishes it from all the law books of the world. When a law, which is somewhat difficult to act upon, is given, it has the prefixes and suffixes of accountability of deeds before Allah Almighty, and the punishment and reward of the Hereafter, so that Muslim minds and hearts become prepared to act upon it; the injunction is announced after that. Here too, the forsaking of the amount of matured riba could weigh heavy on human disposition, therefore, said first was (fear Allah). After that, came the injunction: that is, 'leave off riba that remains.' Towards the end of the verse it was said: that is, 'if you are believers.' Here it was indicated that 'Iman (faith, belief) requires that Divine injunctions should be followed faithfully. Acting otherwise negates 'Iman. Since this injunction was somewhat heavy on temperaments, (Fear Allah) was added before it, and (If you are believers) after it.
After that, in the fifth verse (279), severe warning has been given to those who act contrary to this injunction. They are told if they do not abandon riba, they must face a declaration of war from Allah Almighty and His Messenger. So severe is this warning that any other warning of such severity does not appear anywhere in the Qur'an in relation to any other sin, no matter how great, except kufr (disbelief), of course. The verse then closes with the words: that is, 'if you repent and resolve to leave off the remaining amount of riba in future, you will get your principal.
Neither will you be able to do injustice to anyone by extracting more than your principal, nor will anyone be able to do injustice to you by decreasing or delaying the return of your principal.' Here the receipt of the principal has been conditioned by saying that you repent, and resolve that you will abandon riba in future, and only then, you shall get your principal.
Evidently this indicates if repentance (Taubah) was not done by resolving to give up riba, receiving the principal will no more be in order. Here are the related details. Take the case of a person who just does not believe that riba could be haram and therefore, he does not repent and resolve that he will have nothing to do with riba anymore -then this person goes out of the fold of Islam and becomes an apostate ( : murtadd). The injunction governing an apostate is that his belongings go out of his possession. As a consequence, that which he has earned during the period he was a Muslim, goes to his Muslim inheritors, and that which he earns after involvement with kufr is deposited in the Baytul-Mal (the Exchequer of an Islamic State). Therefore, should his non-repentance be because he considers riba to be halal, he will not be entitled to receive even his principal. And if he does not go to the limit of considering riba as halal but, nevertheless, in actual practice, does not stop getting involved with it and, on top of that, gangs up with his kind and stands in confrontation with the Islamic government, he then is a rebel. His belongings too, are confiscated and placed as trust in the Baytul-Mal, so that it could be given back to him when he repents. Perhaps, it is to point out to such details that it was said in the form of a condition: which implies that, if you do not repent, even your principal will be held back.
After that there is the sixth verse (280) which, in comparison to the anti-human claim of riba, has stressed upon pure moral behavior of showing lenience to the poor and the have-nots. It is said that, if your borrower is too poor to pay back your loan, the provision of Shari'ah is that he be given time until he has the means, and should you forgive him your loan, it is much better for you.
The general habit of riba-consumers is that they, once they know that their borrower is poor and cannot pay the loan back at the appointed time, add up the riba amount in the principal unleashing a vicious series of riba over riba, even increasing the rate of riba in that process.
Here Allah Almighty, the wisest of all law-givers, gave the law that a genuinely poor borrower who is unable to pay back his loan should not be harassed. Instead, he should be given respite until such time that he becomes capable of doing so. Along with it was given the inducement to forgive the loan which is more beneficial for the lender.
The word, sadaqah has been used here by the Qur'an to mean the act of forgiving. The hint given is that this forgiveness will become an act of charity in your case and will bring forth great merit. As for the statement - 'if you forgive, that is better for you' - it can be said that this action was obviously a matter of total loss for them because they were not only being asked to surrender riba but also were going to lose their own principal! Still, the Qur'an called it 'better' (khayr). There are two reasons for this:
1. This betterment will be witnessed soon after the transitory life of this world when, in lieu of this insignificant earning, one will get the eternal blessings of Paradise.
2. Perhaps there may be yet another hint towards the possibility that one will himself see how good comes out of his deeds. There will be barakah (increase, bliss) in what one has. The essence of barakah is that a little serves to take care of a lot more needs, even without a quantitative increase in what one has. As such, it is commonly witnessed that there is unlimited barakah in the wealth of those who spend in sadaqah and khayrat. The little they have serves to take care of so many needs which will never be liquidated with large amounts of money spent by those whose money is haram (unlawful).
Then there is the wealth not blessed with barakah. One never realizes the purpose for which it is spent. Or, it so happens that such rich people have to spend huge amounts of money on undesirable heads such as medicines, treatment and consultancy fees, which is something the poor do not face. First of all, Allah Almighty blesses them with health which frees them from spending on their treatment and, in case they do fall ill, ordinary treatment gives them their health back. Seen from this angle, forgiving the poor person the loan due to him, which is apparently a matter of loss, becomes under this Qur'anic teachings, a beneficial act.
This teaching of giving respite to a poor borrower has also been commended in authentic ahadith some of which are reproduced below. According to a hadith in the Mu'jim of al-Tabarani, a person who wishes to be under the shadow of divine mercy when there will be no other shadow for anyone to hide under, he should treat the poor borrower with lenience and deferment, or forgive him the debt, if it comes to that.
Another hadith similar to this appears in Sahih Muslim as well. It is said in a hadith from the Musnad of Ahmad that the person who grants respite to a penniless borrower will get a daily thawab of sadaqah in proportion to the amount due against that borrower. And this calculation covers the act of giving respite well before the deadline for repayment arrives; and when the deadline for repayment does arrive and the borrower does not have the means to pay, the respite given at that time will bring forth for the giver of respite a daily thawab of giving twice that amount in sadaqah. Another hadeethth says that a person who wishes that his prayer be answered, or his misfortune be removed, he should give respite to the penniless in debt.
In the last verse (281), there appear again the subjects of the fear of the Last Day, its accounting, its rewards and punishment, at which end these verses containing the injunctions of riba. It was said in this last verse: 'fear a day on which all of you will be assembled before Allah when everyone will be fully and equitably recompensed for his deeds and they will not be wronged.'
Sayyidna 'Abdullah ibn 'Abbas Radhi-Allahu Anh: Allah be pleased with himsays that this verse is the last in the order of its revelation. No other verse was revealed after that. Thirty-one days later, the Holy Prophet Sallallahu 'Alayhi Wasallam: Peace be upon him left this mortal world. There are other reports which say that this happened after only nine days.
Upto this point, the explanations have been restricted to the verses of Surah al-Baqarah which concern the injunctions of riba. Dealing with the unlawfulness and prohibition of riba, there are in the noble Qur'an seven verses of Surah al-Baqarah cited above, one verse in Surah Al-'Imran and two verses in Surah al-Nisa'. There is yet another verse in Surah al-Rum the explanations of which differ. Some have taken it too in the sense of usury or interest, while others hold that it has some other connotation. Thus there are ten verses of the Holy Qur'an which carry the injunctions of riba or interest.
Before we get to know the whole truth about riba, it seems appropriate that the translation and explanation of the rest of the verses which appear in the Surahs Al-'Imran, al-Nisa' and al-Rum, should be given here so that it becomes easy for us to understand the true nature of riba in the combined perspective of all these verses. Verse 130, of Surah Al-'Imran (3) reads as follows:
"O those who believe, do not eat Riba, (usury or interest) multiplied many times. And fear Allah, so that you may be successful."
There is a special event behind the revelation of this verse. In pre-Islam Arabia, the general pattern of riba transactions was that loans were given on riba for a set period of time; when that period expired and the borrower was unable to pay it back, he was given an extension of time on the condition that the amount of riba was to be increased. Similarly, if payment was not made even on the expiry of the second deadline, the amount of riba was further increased. This fact is mentioned in general books of Tafsir, specially in Lubab al-Nuqul, on the authority of Mujahid.
The verse was revealed to eradicate this inhuman custom of pre-Islam Arabia. Therefore, by saying (ad'afam' Muda'afatan: multiplied many times) in the verse, their prevailing practice was condemned and they were warned on their selfishness and anti-community conduct, and naturally so, it was declared prohibited. This does not mean that riba will not be prohibited if it happens not to be multiplied many times, because the absolute prohibition of riba has been very clearly stated in Surah al-Baqarah and Surah al-Nisa', irrespective of its being doubled or multiplied many times. This is like it has been said at several places in the Holy Qur'an: (Do not take a paltry price in exchange of My verses). The expression 'paltry price' was used here to indicate that even if the kingdom of the whole world was taken in exchange for the Divinely revealed verses, the price will still be 'paltry.' It does not mean that taking a paltry price against the verses of the Qur'an is haram, but taking a higher price would be permissible. Similarly, the expression (multiplied many times), has been introduced only to focus attention on their shameful method and it is not a necessary condition for the prohibition.
Moreover, if we think about the prevalent methods of riba, we will reach the conclusion that once the habit of taking riba is settled, the riba does not remain simple riba anymore; it necessarily becomes doubled and multiplied because the amount accrued from riba becomes a part of the total amount owned by the creditor and, when he further circulates this additional amount of riba on interest or usury, the riba becomes multiplied. Should this chain action go on building up, nothing can stop it from becoming (multiplied many times). This way every riba will end up increasing several times.
Having dealt with verse 130 of Surah Al-'Imran, let us now look at the two verses, 160 and 161 of Surah al-Nisa' which concern riba. These are as follows:
So, for the transgression of those who became Jews, We prohibited for them the good things earlier made lawful for them and for their preventing (people) frequently from the way of Allah, and for their taking riba (usury or interest) while they were forbidden from it, and for their eating up the properties of the people by false means. And We have prepared, for the disbelievers among them, a painful punishment.
These two verses tell us that riba was equally prohibited under the law of Sayyidna Musa (A.S). When the Jews opposed it, they were appropriately punished in their worldly life when they started devouring the unlawful just out of greed for the mortal gains of the world, consequently then, Allah Almighty declared some lawful things prohibited for them. Verse 39 of Section 4 in Surah al-Rum is as follows:
'And what you give in usury, that it may increase upon the people's wealth, increases not with God; but what you give in alms, desiring God's Face, - they shall receive recompense manifold.' (30:39)
Some commentators have taken this verse, like others mentioned earlier, to be dealing with interest or usury in view of the use of the word riba meaning 'increase' in the text. According to them, the verse means that money does seem to increase apparently by taking interest, but in fact, it does not. It is like the case of a person whose body gets swollen. Obviously this 'increases' his body but no sane person would be happy with this sort of 'increase'. On the contrary, he would regard it as death in the offing. As compared to this, the giving of zakah and sadaqah does seem to decrease the wealth apparently, but that is no decrease in fact, rather on the contrary, it is the source of thousands of increases. It is like someone who takes purgative as system-cleanser or lets blood as a therapeutic measure; he looks weak on the outside and seems to miss something in his body but those who know regard this 'decrease' to be a fore-runner of his 'increase' in health and strength.
According to some scholars of tafsir, this verse does not refer to the prohibition of usury or interest at all, rather, the word riba' used in that verse refers to a gift presented to someone, not in good faith, but with the intention that it would bring back some better gift in return from the receiver. The gifts of this type are in vogue in some communities at the time of marital ceremonies Since this type of giving is to seek selfish ends and not to seek the pleasure of Allah Almighty, therefore, it was said in the verse that by doing so your wealth may seem to increase, but actually it does not increase with Allah, while that which is given as zakah and sadaqat to seek the pleasure of Allah Almighty goes on to double and redouble with Allah.
According to this explanation, the sense of the verse will match with what was said addressing the Holy Prophet Sallallahu 'Alayhi Wasallam: Peace be upon him in another verse (74:6): that is, do not do favour to anyone with the intention that it may bring to you some added benefit in return.
This second explanation appears to be obviously weightier in connection with this verse of Surah al-Rum. Firstly, because Surah al-Rum is Makki. Although, it is not necessary that every verse in a Makki Surah is revealed in Makkah, yet there exists strong probability that it is so unless proved otherwise. And in case the verse is Makki, it cannot be interpreted to carry the sense of the prohibition of riba because the prohibition of riba came by revelation in Madinah. In addition to this, the subject dealt with earlier than this verse also indicates a tilt towards this explanation. There it was said: which means: 'Give to the relative his due, and to the poor and the wayfarer. This is better for those who seek the pleasure of Allah.'
In this verse, it has been stated that spending on relatives, the poor and the wayfarers can become an act of thawab only on the condition that the intention behind it should be that of seeking the pleasure of Allah Almighty. Then, following that, in the verse under discussion, it was further explained that financial help given to someone with the hope that it will bring back greater return from the receiver of the help is certainly no spending in the way of Allah where the purpose is hardly to seek His pleasure. As a result, this will bring no thawab.
Anyhow, there are, beside this particular verse, several other verses cited earlier which do deal with the prohibition of riba. Out of these, there is the verse from Surah Al-Imran which prohibits doubled and multiplied riba; the rest of the verses state the prohibition of riba as such. These details, at the least, clear this much that riba is haram (unlawful) anyway, be it doubled and multiplied, simple or compound. It may be kept in mind that the degree of its being haram is so severe that a declaration of war has been made on behalf of Allah and His Messenger against those who challenge the injunction.
Some Additional Details About Riba
Since riba has become the supporting pillar of the prevailing trading system today, it is commonly noticed that people are usually disposed to balk at the idea of its unlawfulness when confronted with its prohibition under the verses of the Book of Allah and the Traditions of the Holy Prophet Sallallahu 'Alayhi Wasallam: Peace be upon him. Rather than understand and explain its real nature, they tend to diffuse the issue with excuses. I wish to state humbly that the issue has to be first analysed and discussed sanely by taking up each aspect in its proper setting, without which we are sure to end up confusing issues. There are three parts of this discussion:
1. What is the real nature of riba in the Qur'an and Sunnah, and what forms it does it cover?
2. What is the wisdom behind the prohibition of this riba!
3. Granted that riba, no matter how evil it may be, has become a pillar of the economic system all over the contemporary world. Now if we were to abandon it, under injunctions of the Qur'an, how will the system of banking and trade run?
To begin with, the word, (Riba) is a well-known word in the Arabic language. This word was known, not only since the blessed appearance of the noble Prophet Sallallahu 'Alayhi Wasallam: Peace be upon him, but also during the time when Arabia was pagan and the Qur'an was not yet revealed. Moreover, the verses of Surah al-Nisa' also tell us that the word riba and its related dealings were equally well-known during the times of the Torah, where too, it was declared haram (unlawful).
It is obvious that riba was known since ages in Arabia and its environs. Continuous transactions were being made as an established custom. When the Qur'an was revealed, it not only prohibited riba but also gave the information that riba was made unlawful for the community of Musa (A.S) as well. How then, can the nature of this word become something so ambiguous that it starts presenting difficulties in understanding and explaining its meaning and applications?
This is the reason why, in the year of Hijrah 8, when the verses of Surah al-Baqarah relating to the unlawfulness of riba were revealed, there appears no report from the noble Companions anywhere which may indicate that they had to face any doubt in understanding the real nature of riba, and that they had to go as far as to verify it with the Holy Prophet Sallallahu 'Alayhi Wasallam: Peace be upon him himself, something they did in other matters. On the contrary, just as they immediately acted upon the injunction prohibiting liquor the moment it was revealed, very similarly, they abandoned all riba transactions the moment the injunction prohibiting riba was revealed. The Muslims just cancelled all riba amounts that non-Muslims owed to them on all their deals made before the prohibition. Then, the case of Muslims who did not wish to give riba amounts they owed was brought to the court of the Amir of Makkah. He inquired the Holy Prophet Sallallahu 'Alayhi Wasallam: Peace be upon him. The deciding injunction was revealed by Allah Almighty through the verses of Surah al-Baqarah which declared that it was also not permissible now to give or take riba amounts that belonged to the previous times.
Here the non-Muslims might have found the ground to question as to why should they suffer loss of money because of an injunction of Islamic law? Therefore, in order to offset that possibility, the Holy Prophet Sallallahu 'Alayhi Wasallam: Peace be upon him made it clear in his Address of the Last Hajj that this injunction of Islamic law affects, not only the non-Muslims, but also the Muslims in an equal degree. And the very first amount of riba that was written off was the enormous amount which belonged to Sayyidna 'Abbas Radhi-Allahu Anh: Allah be pleased with him, the respected uncle of the Holy Prophet Sallallahu 'Alayhi Wasallam: Peace be upon him.
In short, when riba was prohibited, its meaning was no secret. It was a known practice. It was the same riba as the Arabs used to give and take it and called it as such. The Qur'an made it haram, and the Holy Prophet Sallallahu 'Alayhi Wasallam: Peace be upon him enforced the ruling, not in the form of some moral teaching, but as the law of the land. However, he did include certain forms of transactions under riba which were not generally held to be riba. It was the determining of these very forms that posed difficulties for Sayyidna 'Umar Radhi-Allahu Anh: Allah be pleased with him, and here it was that the leading jurists of Islam differed; otherwise, the real riba, which the Arabs knew by that very name, was never doubted or questioned by anybody as there was no reason to do so.
Now let us find out what riba the Arabs were used to. The renowned commentator, Ibn Jarir has reported from Sayyidna Mujahid that the riba practised in pagan Arabia which was prohibited by the Qur'an consisted of giving loan for a fixed period and then taking a fixed increase over and above the principal. If the loan was not paid back on the fixed date, an extension of time was granted on condition that the riba was to be further increased. The same information has been reported from Sayyidna Qatadah Radhi-Allahu Anh: Allah be pleased with him and from other leading commentators. (Tafsir ibn Jarir, page 62, volume 3)
Abu Hayyan al-Gharnati (ra), the famous commentator from Andulusia (Spain) has, in his commentary - al-Bahr al-Muhit, reported the same form of riba prevailing in pagan Arabia, that is, they advanced a loan, took their 'profit' on it, and if the time for repayment was to be extended beyond the first due date, they increased the amount of interest in that proportion. This was called riba. These were the people of the same pagan Arabia who said that taking 'profit' when they give their money on loan should also be permissible similar to buying and selling where taking 'profit' is permissible. The Holy Qur'an declared this to be haram and made it clear that the injunctions governing buying and selling were different.
The same subject has been authentically narrated in all reliable books of Tafsirs such as, Tafsir Ibn Kathir, al-Tafsir al-Kabir and Ruh al-Ma'ani etc.
Ibn al-'Arabi (ra) has said in Ahkam al-Qur'an: Lexically, riba means increase, and in the verse, it means the increase against which there is nothing in exchange but a loan and its time.
Imam al-Razi (ra) has said in his Tafsir that riba takes two forms. It could be riba in trading transactions, and in loans. This second form was what commonly prevailed in Jahiliyyah or pagan Arabia. The known practice was that they would give their money on loan to someone for a fixed period of time and receive 'profit' against it every month. If the borrower failed to pay back at the appointed time, the time-limit was extended on condition that the amount of riba was to be further increased. This was the riba of the Age of Ignorance (Jahiliyyah) which was declared haram (unlawful) by the Holy Qur'an.
In Ahkam al-Qur'an, Imam al-Jassas defines riba as follows: The loan given for a certain time on condition that the borrower will pay an increased amount above the principal.
In a hadeeth, the Holy Prophet Sallallahu 'Alayhi Wasallam: Peace be upon him has defined riba by saying: [n]The loan that draws profit is riba.[/n]
This hadith appears in al-Jami' al-Saghir and al-Azizi calls it hasan. To sum up, the giving of loan and then taking 'profit' on it is riba, which was widely known and practised during the Jahiliyyah in Arabia, which was clearly declared haram. by the subject verse of the Holy Qur'an, and which was abandoned by the noble Companions the moment these verses were revealed, and the Holy Prophet Sallallahu 'Alayhi Wasallam: Peace be upon him enforced its prohibition through his judgments in the legal suits. As there was no ambiguity in its connotation, nobody faced any doubt or difficulty in understanding the term.
However, the Holy Prophet Sallallahu 'Alayhi Wasallam: Peace be upon him did include some forms of buying and selling within the range of riba which the Arabs did not take as riba. For instance, in the buying and selling of six commodities on barter basis, he ruled that they be exchanged like for like, equal for equal, and hand-to-hand. Any deviation in measure, more or less, and any credit-oriented transaction with regard to these commodities will also fall within the purview of riba. These six commodities are gold, silver, wheat, barley, dates and grapes.
Under the same principle, the Holy Prophet Sallallahu 'Alayhi Wasallam: Peace be upon him, after the revelation of the verses of riba, ruled that some forms of transactions in vogue known as al-muzabanah [Al-muzabanah () is the sale of fruit upon its tree by taking fruit already plucked on the basis of conjecture.] and al-muhaqalah [Al-muhaqalah () is the sale of grains, such as wheat, chick-peas etc, still in the ears of their standing crop by taking dried and husked wheat or chick-peas on the basis of conjecture. Since conjecture has the possibility of things turning out less or more, it was prohibited.] come under riba, and therefore, declared them to be haram. (ibn Kathir with reference to Mustadrak Hakim, page 327, Volume 1).
Here the question worth consideration was: Are these six commodities particular as such, or there are other commodities also which fall under the same injunction? If there are some, what shall be the the basis for including other commodities under the same rule? What forms shall be taken to have come under riba? This was the difficulty faced by Sayyidna 'Umar Radhi-Allahu Anh: Allah be pleased with him because of which he said: The verse of riba is among the last verses of the Qur'an. The Holy Prophet Sallallahu 'Alayhi Wasallam: Peace be upon him was taken away before he could make its details clear for us. So give up not only riba but also all the doubtful transactions. (Ahkam al-Qur'an, Jassas, page 551 and Tafsir Ibn Kathir, with reference to Ibn Majah, page 328, volume 1).
Here Sayyidna 'Umar Radhi-Allahu Anh: Allah be pleased with him is talking about the particular forms of buying and selling transactions, and their details, which were not taken as riba in Jahiliyyah. Bringing these under the category of riba, the Holy Prophet Sallallahu 'Alayhi Wasallam: Peace be upon him made them haram. As regards the main riba, which was commonly known in Arabia and which was abandoned by the noble Companions and was enforced by the Holy Prophet Sallallahu 'Alayhi Wasallam: Peace be upon him announcing its prohibition publicly during his Address of the Last Hajj, it was not possible at all that Sayyidna 'Umar Radhi-Allahu Anh: Allah be pleased with him would have faced any difficulty or doubt in understanding it. Moreover, when Sayyidna 'Umar Radhi-Allahu Anh: Allah be pleased with him did face doubt in certain forms of riba, he resolved the problem by proposing that the forms where there is the least doubt of riba should also be abandoned.
But it is surprising that some of those who are slavishly impressed by the veneer of glamour, wealth and the interest-based trading system of today, have deduced from this saying of Sayyidna 'Umar that the sense of riba had thus been left abstract and that there is room for personal opinion here, the error of which has already been proved by a lot of material before us. In Ahkam al-Qur'an, Ibn al-'Arabi (ra) has strongly refuted those who had used the words of Sayyidna 'Umar Radhi-Allahu Anh: Allah be pleased with him to classify the verses of riba as abstract. He says: He who claimed that this verse is abstract did not understand the clear and confident affirmation of the Shari'ah because Allah Almighty sent His messenger to a people of whom he was one, sent him (speaking) in their language, revealed His Book to him so that they comprehend it easily in their language, and in their language the word riba means 'increase'; and in the verse, it means the increase that has no financial consideration against it, (but simply time).
Imam al-Razi (ra) has said in his commentary that riba is of two kinds - the riba on loans and the riba of taking more on barter. The first kind was well-known in Jahiliyyah and people during those days used to transact it freely. The second kind is what comes through the hadith which rules that increase or decrease in the barter of certain commodities is also included under riba.
It appears in Ahkam al-Qur'an of al-Jassas (ra) that riba is of two kinds - the riba in buying and selling and the riba without buying and selling. The riba of Jahiliyyah belonged to this very second kind. By definition it means the loan on which 'profit' is taken on the basis of time duration. Ibn Rushd has, in Bidayah al-Mujtahid, taken the same view, and has further proved the unlawfulness of the riba of taking profit' on loans, on the authority of the Qur'an, the Sunnah and the consensus of the Muslim community.
In Sharh Ma'ani al-Athar, Imam al-Tahawi (ra) has taken up this subject in great detail. He has said that the riba mentioned in the Qur'an is, openly and clearly, the riba that was given and taken on loans, and it was known as riba in Jahiliyyah. After that, it was through the statement of the Holy Prophet Sallallahu 'Alayhi Wasallam: Peace be upon him, and his Sunnah, that the other kind of riba became known, and which was identified with increasing, decreasing or non-cash dealing in particular types of buying and selling activity. That this riba is also haram stands proved by repeated ahadith of the Holy Prophet Sallallahu 'Alayhi Wasallam: Peace be upon him. However, in the absence of fully clear details governing this kind of riba some Companions of the Holy Prophet Sallallahu 'Alayhi Wasallam: Peace be upon him faced difficulty and jurists differed, (op cit., page 232, vol. 2)
Shah Waliullah (ra) has said in Hujjatullah al-balighah that these are two separate things. One is the riba in real terms, and the other is that which is included in the prohibition of riba. The riba in real terms means something additional claimed over the principal in a transaction of loan. But the hadith has included in the prohibition a transaction of bartering certain commodities whereby an additional measure is claimed in exchange of the same commodity. When it appears in the hadith of Saheeh al-Bukhari that: "There is no riba except in nasi'ah (loan)", it simply means that the real and primary riba, the one that is commonly understood and termed as riba, is nothing but taking 'profit' on loans. Excepting this, all other kinds have been annexed with it by extending prohibition to all of them.
Summing Up The Discussion
1. Riba was already a known transaction before the revelation of the Qur'an. The taking of increase on loans given for a certain time was called riba.
2. The noble Companions, all of them, abandoned this riba the moment its unlawfulness was revealed in the Qur'an. None of them had any difficulty or doubt in comprehending or explaining its meaning.
3. In the barter transactions of six commodities it was declared by the Holy Prophet Sallallahu 'Alayhi Wasallam: Peace be upon him, that whenever any one of these is bartered with a similar commodity, both of them must be equal in weight or measure. Any increase or decrease in such transactions has been declared as included in the prohibition of riba. This much was expressly told by the Holy Prophet Sallallahu 'Alayhi Wasallam: Peace be upon him. But the question was whether this special type of prohibition is restricted to these six commodities alone or it extends to some other commodities also, and if it extends to some other commodities, on what basis one can identify those commodities.
This question needed a deeper insight into the juristic issues involved, and the Muslim jurists came out with different suggestions to answer this question. It was this very question that agitated the mind of Sayyidna 'Umar Radhi-Allahu Anh: Allah be pleased with him. Since the Holy Prophet Sallallahu 'Alayhi Wasallam: Peace be upon him had not stated these rules himself and because doubt lurked therein, Sayyidna 'Umar Radhi-Allahu Anh: Allah be pleased with him regretfully wished how good it would have been if the Messenger of Allah Sallallahu 'Alayhi Wasallam: Peace be upon him had set the relevant rules himself which would have given them peace of mind in doubtful situations. Then he said that not only riba, but also the very doubt of riba, wherever it may be, should be avoided.
4. It is certain that the real and primary riba, which the Muslim jurists have called "riba al-Qur'an" (the riba of Qur'an) or "riba al-Qard" (the riba of loan), is exactly what was known and practised in Arabia, that is, claiming 'profit' on loan against the time allowed for repayment. Other kinds of riba identified in hadith are all annexed to this very riba and come under the injunction governing it. As regards the difference of opinion that rose in the community was exclusively related to this second type of riba deals. The first kind of riba is called 'riba al-Qard' or "the riba of Qur'an"; that it is categorically baram (forbidden) has never been disputed in the Muslim community.
In short, the riba of today which is supposed to be the pivot of human economy and features in discussions on the problem of interest, is nothing but this riba, the unlawfulness of which stands proved on the authority of the seven verses of the Qur'an, of more than forty ahadith and of the consensus of the Muslim community.
The second kind of riba which occurs in buying and selling is neither common in practice, nor requires any discussion here.
Upto this point, effort was made to clarify the meaning of riba as contemplated in the Qur'an and Sunnah, which is the first step towards understanding the problem of interest.
The Wisdom Behind The Prohibition
Now comes the second part of the discussion which relates to the wisdom behind the prohibition of riba and to the spiritual and economic harms of riba transactions because of which Islam has declared it to be such a major sin.
First of all, we should realize that there is nothing in the entire creation of the world which has no goodness or utility at all. Even in serpents, scorpions, wolves, lions, and in arsenic, that fatal poison, there are thousands of utilities for human beings. Is there anything in this vastness of nature which could really be called bad? Take theft, robbery, villainy, bribery - not one of these remains without this or that benefit. But, it is commonly recognized in every religion and community, in every school of thought, that things which have more benefits and less harms are called beneficial and useful. Conversely, things that cause more harm and less benefit are taken to be harmful and useless. Even the noble Qur'an, while declaring liquor and gambling to be haram, proclaimed that they do hold some benefits for people, but the curse of sins they generate is far greater than the benefits they yield. Therefore, these cannot be called good or useful; on the contrary, taking these to be acutely harmful and destructive, it is necessary that they be avoided.
The case of riba is not different. Here the consumer of riba does have some temporal benefit apparently coming to him, but its curse in this world and in the Hereafter is much too severe as compared to this benefit.
An intelligent person who compares things in terms of their profit and loss, harm and benefit can hardly include things of casual benefit with an everlasting loss in the list of useful things. Similarly, no sane and just person will say that personal and individual gain, which causes loss to the whole community or group, is useful. In theft, and in robbery, the gain of the gangster and the take of the thief is all too obvious, but it is certainly harmful for the entire community since it ruins its peace and sense of security. That is why no human being calls theft and robbery good.
After these introductory remarks, let us look at the problem of riba. A little deliberation will show that its spiritual and moral loss as compared to the casual or transitory profit earned by the riba-consumer is so severe that it virtually takes away the great quality of being 'human' from him. Again, it should be borne in mind that the transitory gain that comes to him is restricted to his person only. As compared to this, the entire community, victimized by economic crisis, suffers great loss. But, strange are the affairs of the world. When something becomes the craze of the time, its drawbacks go out of sight. One looks for nothing but gains - no matter how small, mean and casual be those gains. Nobody cares to look at the harm lying under them - no matter how fatal and universal it may be.
Custom and practice act like chloroform on human temperaments. They make them insensitive. There are very few individuals who would investigate into prevailing customs and practices and then try to understand how beneficial or harmful they are. Bad coming to worse, even if such harms are identified and people are openly warned of the dangers, the conformity to prevailing custom and practice is such that the right course is just not taken.
Riba has become an epidemic in modern times holding the entire world squeezed in its clutches. In fact, it has so reversed the very taste of human nature that the bitter has started tasting sweet. That which is the cause of economic ruin for the entire humanity is being dished out as the solution of economic ills. The situation is such that a thinker who raises his voice in protest is brushed aside as crazy.
All this is what it is. But a physician of humanity must remain the physician he is. Should he, after having closely observed that epidemic has spread in an area and treatment has become ineffective, start thinking of telling people that there is just no disease around and everything is fine, he then becomes a killer of humanity robbing it of its potential. It is the duty of a really expert physician of human affairs, even at a time such as this, that he should continue telling people about the disease and its harmful effects and keep suggesting ways it could be cured.
The prophets (A.S) come to reform human society. Whether or not they will be heard is something they never worry about. If they had waited for people to hear and obey them, kufr and shirk would have certainly filled the whole world. Incidentally, who believed in the kalimah: "There is no God but Allah" when the Last of the Prophets Sallallahu 'Alayhi Wasallam: Peace be upon him, was ordained by Allah for its preaching and teaching?
Although riba is taken to be the backbone of contemporary economy, but the truth of the matter is, what some Western thinkers have themselves admitted, that it is no backbone of economics, rather on the contrary, it is a worm grown in and feeding on it.
But it is regrettable that even theoreticians and scientists of today are unable to free themselves from the stranglehold of custom and practice and do some serious thinking in this direction. How is it that even the experience of hundreds of years fails to attract their attention towards the ultimate outcome of riba or interest, which is nothing except that peoples and communities around the world suffer from want and hunger, become victims of many an economic crisis and the poor grow poorer. As compared to their fate, some capitalists take advantage of the wealth of the whole community, become its leeches sucking blood from the body of the community and helping themselves to grow and prosper. The gall of these intellectuals is indeed surprising. When this reality is presented before them, they would like to refute us by taking us to the market places of U.S.A. and E.E.C. so that we could observe the blessings of interest. They like us to be impressed by the prosperity they have acquired through it. In fact, this is like taking us to show the blessings of acts committed by some nation of man-eaters and telling us how chubby and flushed with 'health' they are in their residences and work-places. Then to top that assertion, effort is made to prove on this basis, that this act of theirs is the best of acts.
However, in answer to that, any sane and just person would simply suggest that the 'blessings' of the act of man-eaters cannot be observed in the habitat of the man-eaters. One has to go to other habitats where lie dead bodies in thousands and thousands on whose blood and flesh these beasts have grown. Islam and the Shari'ah of Islam can never accept such an act as correct and useful, as a result of which, the humanity in general and the Muslim community in particular becomes a target of destruction while some individuals, or their groups, go on prospering.
Economic Drawbacks Of Riba (Interest)
If there was no other defect in riba except that it results in the gain of some individuals and the loss of the whole humanity, that one and very defect would have been enough to justify its prohibition and hate-worthiness, although, it does have many other economic drawbacks and spiritual disasters.
First of all, let us understand how riba is the gain of particular individuals and the loss of a community in general. The hackneyed method of riba practised by usurers was so crude that even a person of ordinary commonsense could see how it benefitted a particular person and harmed the community in general. But 'the new enlightenment' of today, or shall we call it 'the new darkness', by producing 'purified' liquor through mechanical processing and aging, by inventing new and fancy forms for theft and robbery, and by innovating novel covers for evil and immodesty, has made everybody so 'civilized' that watchers of the surface are unable to see the evil hidden behind.
Very similar to this, in order to continue the practice of riba or interest, individual money-lending counters have been replaced by joint stock companies called banks. Now, to throw dust in everybody's eyes, consumers are 'educated' that this modern method of riba is good for the whole community because common people do not know how to run a business with their money, or cannot do so due to shortage of capital, so money they all have goes as deposit in banks and everyone of them manages to get, no matter how little, some profit in the name of interest. In addition to that, big businessmen are given the opportunity to borrow money on interest from banks, invest in big business and reap the benefits. Thus interest has been made to appear as some sort of 'blessing' which is reaching all individuals of the community!
However, a little honesty will show that this is a grand deception which, by transforming dirty distilleries into posh hotels and hooker-dens into cinemas and night clubs, has been released to present poison as antidote, and the harmful as beneficial. Intelligent people have no problem in seeing through the deceptive covering placed on anti-moral crimes. They know it has inevitably increased crimes, spreading its poison more acutely than ever before. Similar is the case of riba, the new form of which, by making the masses have a sip of an insignificant percentage of interest, has made them accomplices in their crime; while at the same time, they opened for themselves limitless opportunities to keep committing this crime.
Who does not know that this insignificant percentage of interest doled out by 'saving' banks and post offices to clients cannot, by any means, take care of their living expenses. They are, therefore, forced to go for manual labour or seek a job. Business is something they hardly think of themselves, and if somebody does play with the idea for a while, the problem is that the capital of the entire community sits in the banks and the shape of things in business is such that a person with a small capital can hardly make an entry there unless he wishes to commit suicide. The reason is that banks can advance a major loan only to one who has sound credit and large business. One who has a million can get a loan of ten millions. He can run a business valued ten times more than his personal capital would allow. In contrast, the man with a small capital has little or no credit rating; the banks do not trust him enough to advance a loan ten times more than his worth. One who owns a thousand can hardly get an even thousand, let alone ten thousand. Take the case of a person who owns a hundred thousand and runs a business worth a million by using nine hundred thousand of bank money.
Suppose he earns a profit of one per cent which means he has earned a ten per cent profit on his hundred thousand. In comparison, a person who uses his personal hundred thousand in business, will earn a profit of no more than one per cent on his hundred thousand, which would be hardly enough to cover even his operating expenses. Then there is yet another factor; the man with a large capital can buy raw material from the market at a price so low and discounted which the small capitalist cannot get. As a result, the man with a small capital is rendered helpless and needy. Should he, secretly pursued by his misfortune, put his foot into some such business already monopolized by big capitalists, they will then, taking him to be an unwelcome partner in their godhood, make the market collapse, even if it be at their cost, making the small capitalist lose all his capital and profit. This is why business gets monoplized by some individuals who happen to be big capitalists.
Let us consider some other injuries caused by this interest-oriented economic system:
1. First comes the great injustice inflicted on the community when a whole set of people are deprived of the opportunity to engage in real business, and are reduced to economic slavery of big capitalists, who elect to give them a 'profit' of their choice as some tip.
2. Another loss that affects the whole country comes through the monopolization of market rates of commodities made possible by this system. They sell high and fill their coffers by emptying the pockets of the whole community. Worse still, they have the evil choice of stopping the sale of their holdings in order to further increase prices by design. If these selfish people were not allowed to feed on the combined capital of the community through the agency of banks, and if they were left with no other alternative but to run their business with their personal capital, things would be different. The small capitalist would have been saved from distress and these self-serving people would not be sitting as demi-gods on all trading options. The investors with a small capital, by showing profits in business ventures, would have given impetus to others. More and more businesses would come up managed by separate staffers giving livelihood to thousands of needy individuals besides making business profits fairly widespread, and of course, the general availability of merchandise in the market would be favourably affected. The reason is competition which motivates a businessman to reduce his margin of profit.
In short, this Machiavellian method has infected nations and communities with a fatal disease, apart from the brain-washing it has done which makes the patient take disease as the cure.
3. Now let us look at the third economic disaster engineered through bank interests. Here is a person with a capital of ten thousand and he goes in business worth a hundred thousand, the additional capital advanced by a bank as interest-bearing loan. If by chance, he is hit by loss, his capital sinks and he goes insolvent then the outcome is interesting. Just imagine that he bears only ten per cent of the loss, while the rest of the loss, that is ninety per cent, is absorbed by the whole community, whose money he had borrowed from the bank to invest in his business. Even if the bank writes off the loss as an interim measure, it is clear that the bank is the pocket of a nation, and the loss will ultimately hit the nation. The outcome is that the borrowing capitalist was the sole owner of the profit as far as the profit kept coming, leaving nothing or very little for the community. When came the loss, it was passed on to the whole community.
4. Yet another economic drawback of riba lies in the predicament of the borrower on interest when he is hit by a major loss. Once this happens he is unable to survive anymore. To begin with, he never had enough capital the loss of which he could cushion. The loss throws him into a double distress. Not only does he lose his profit and capital but also, at the same time, gets buried under the bank loan for the liquidation of which he has no means. As compared to this, should he lose his entire capital in an interest-free business, he would, at the most become penniless but, burdened with debt he definitely will not be.
In 1954, the cotton business of Pakistan suffered, to use a word of the Qur'an, with the calamity of muhaq (destruction by loss). The Government rescued the businessmen at the cost of millions of rupees but nobody bothered to realize that all this was a curse of riba or interest, for the simple reason that cotton dealers had invested mostly bank-borrowed capital in this business. Their own capital was insignificant. As Divine decree would have it, the cotton market fell so sharply that its price zoomed down from rupees one hundred and twenty-five to just ten rupees. The cotton traders were rendered incapable of returning money to cover bank margins. Left with no choice, the market was closed down and an SOS was sent to the Government. The Government stepped in and bought off the stocks, not at rupees ten, but at the raised price of ninety rupees. Thus it took upon itself the loss of millions and saved these traders from going insolvent. Whose money did the Government have? Naturally, it belonged to the same helpless poor nation, the Muslim ummah.
In short, the naked result of banking business is that some individuals reap benefits out of the capital of the entire community and the loss, when it comes, is made to fall on the whole nation.
The Design For Deception
You have already seen how riba and interest prey on communities and nations and how some individuals are promoted instead. Along with it, you would do well to discover yet another demonstration of evil genius. When the consumers of riba realized, out of their own experience as well, what the Qur'an has said: - that is, earnings of interest have to suffer from the calamity of muhaq, from loss and destruction, as a result of which one has to go insolvent - they established two permanent institutions: The Insurance and the Stock Exchange. They saw that losses in business occur for two reasons. One of these takes the form of natural calamity like the drowning or burning of a ship or some such mishap of some other nature. The other could be that market rates of stock in hand go lower than its purchase price. The capital invested in both these situations is the jointly owned capital of the community, not that of the individual capitalist, therefore, the loss of the community is higher, and that of the individual capitalist, minimal. But they did not stop at that. In order to shift even this minimal loss factor on to the shoulders of the community, they floated insurance companies which hold the capital of the community, just as banks do. When some natural calamity inflicts losses on these consumers of riba, they use the medium of insurance to shift, not just partial, but the entire loss to the jointly held capital of the community.
People think that insurance companies are God's mercy as they rescue the sinking. But should they observe and think honestly, they would start seeing the same deception here too. Isn't it that their capital was formed by contributions from the community enticed by the promise of help in the event of unforeseen accidents. The truth is that the advantage of receiving large sums of money is derived by capitalists of higher rating, who would, on occasions, burn or bang their own car or get it stolen in order to buy a new one out of the insurance claim. At the probability rate of one or two percent there would be a couple of lucky fellows who might get some money because of accidental death.
Then there is the second kind of institution, the stock exchange which served as a defensive shield against price slumps. This speculative contraption was used to spread out the ill-effects of deals over every individual of the community, transferring thereby the loss coming to them onto the community once again.
This brief account, it is hoped, may have given you at least the idea that bank interest and the business it helps to flourish is the cause of want, hunger and economic incapacity of the entire humanity. Of course, some wealthy individuals have their wealth further increased through this method which results in the unmaking of the community and the making of some individuals who hold the key to the accumulated capital of the country or nation in their hands. Generally governments did notice this enormously disturbing phenomena but the cure they came up with was to increase the income tax rate for big capitalists, so much so that the maximum rate was set almost close to hundred per cent, which was all designed to funnel capital from them back into the national treasury. But, as a result of such laws and as everyone knows, factories and businesses started maintaining fictional or doctored accounts. In order to hide a lot of capital from the Government, money once again started going into private treasuries.
To sum up, it is universally clear that concentration of wealth in the captivating hands of few individuals of a nation is highly injurious to the economic health of the country. This is why income tax rates are pushed so high, but experience bears out that this was no cure to the disease. Maybe the reason is that the disease was not correctly diagnosed, and the real cause remained undiscovered. This sort of treatment reminds one of the Persian line saying: 'you closed the door for safety without finding out that the enemy was sitting inside the house'.
The reason why wealth concentrates in the hands of big capitalists is nothing but interest-oriented business and the unjust profiteering from national wealth by particular individuals. Unless we put an end to this in accordance with the teachings of Islam and unless we promote the practice that everyone goes in business with 'his' capital only, this disease cannot be cured.
A Doubt And Its Answer
The question arises here when public money is deposited in banks some benefit does trickle on to people, no matter how little it may be. Maybe, the big capitalists did manage to extract more benefits out of it. But what would happen if this system of depositing money in the banks was not there? The whole thing will end up being what it was in old days when money used to stay in underground chests, which was of no immediate use to the owner, or to anybody else.
The answer to this is that Islam has, on one hand, by declaring interest or riba to be haram (unlawful), closed the door on the concentration of national wealth in the hands of a known few capitalists, while at the same time, it has, by imposing the obligation of the levy of zakah, compelled every owner of the above-threshold capital not to keep his capital frozen but invest it in business. Should a person hoard up his money or gold, and since zakah is a recurring obligation to pay, he will still be giving out the fortieth part of his holdings as zakah every year, as a result of which whatever he has will not be there anymore. Therefore, every sane person will have to put his capital in some useful enterprise, enjoy its benefits and allow others to share it with him and then, from the profit that he makes, he pays his zakah 'properly' as required.
The Obligation Of Zakah Ensures Progress In Business
We know that paying zakah properly has a great utility of its own. It aims to help the poor and the needy in the community. Similarly, this obligation is a wonderful method of persuading people to go in business, so that the economic status of Muslims is upgraded. It is clear when everybody realizes that frozen capital gets no profit, on the contrary, the fortieth part is invariably chiselled away at the end of each year, he will have to think of investing his money in some business. But his business will not follow the model of one man running a business on the strength of capital supplied by millions of people. That model works on interest. Since marketing money is haram, every wealthy person will seek to go in business on his own. And when it so happens that big capitalists are left with no choice but to engage in business supported by their personal capital, those with a small capital will not face the sort of difficulties in business take-offs that confronted them in the event they sought bank loans on interest to run a larger business. Thus the whole country will benefit by the universalization of business and its profits. When this happens, the poor and the needy in the country would certainly become beneficiaries of the system.
Interest: The Spiritual Ills
Upto this point we were talking about the economic destructivity of interest. Now let us see how interest-oriented business so adversely affects the morals, and the spiritual potential of man:
1. Sacrifice and generosity are great qualities in human morals. Giving comfort to others at the cost of personal discomfort is wonderful. Interest-loaded business invariably leads to the extinction of this emotional refinement. A compulsive consumer of interest would hardly bear to see somebody else rising up to his level with the help of personal effort and capital. That he would think of passing some benefit to somebody from his resources is a far cry.
2. Rather than be merciful to the distressed, he is on the look out for an opportunity to take undue advantage of his distress.
3. The constant devouring of interest results in increasing greed for money to limits where he is all intoxicated, not knowing good from bad - totally heedless of the sad end of what he is doing.
Is it Impossible to Run a Business Without Interest?
A discussion of the nature of riba and the ills it plants and promotes in this world and in the Hereafter has already appeared in some details. Now remains the third part relating to the solution of the problem. We have seen its economic and spiritual drawbacks and we know clearly that it has been strictly forbidden in the Qur'an and Sunnah. But the problem is that riba, of all the things, is sitting solid as the sheet-anchor of business in contemporary society. This is the wheel on which runs world business. How can we get free from its hold? These are times when getting rid of the banking system would mean closing down all business.
This can be answered by pointing out that a disease, once it spreads out and becomes an epidemic, certainly poses problems. Treatment does become difficult but useless it is not. Efforts made to correct the system do succeed finally. However, what is needed in the process is patience, steadfastness and courage. It is in the noble Qur'an itself that Allah Almighty has also said:
'Allah has not burdened you with any hardship in religion.' (22:78)
Therefore, there must be a way to avoid riba. in which there is no economic loss, doors of national and international business are not closed, and salvation from riba is also achieved.
To begin with, it is generally thought that, given the governing principles of banking as seen from the outside, banking system depends on riba. Without it the banks just could not run. But, this thinking is categorically incorrect. The banking system could still survive as it is even without riba. It could rather come out in better shape, beneficial and useful. However, in order to do so, it is necessary that a group of experts in Shari'ah and banking should, by consultation and cooperation, reconstruct its operating principles. With their proposals and projections, success will not remain far. When the day comes, the day when the banking system is run on the principle of Shari'ah, the whole world will, Inshallah, witness the real summum bonum, the great good of the nation and the community it brings in its wake. However, this is not the place to explain these principles and rules based on which the banking system could be run without riba.
[This humble writer had, in consultation with some 'ulama', prepared a draft proposal of interest-free banking way back, and this was approved by some experts as practical in present day perspective. There were some who even put this in practice but finally, it did not work due to apathy of businessmen, and of course, the non-availability of Government sanction. ]
Riba is presently 'needed' for two reasons. If needed in business, that can be taken care of by amending the current banking rules. The second compulsion, why the poor and the needy get involved with riba or interest, is that of their inevitable accidental needs. The best solution to this situation is already present in Islam in the form of zakah and obligatory sadaqat. But, because of heedlessness towards religion and the sources of its knowledge, even the system of zakah has been left inoperative (or ineffective). There is a countless number of Muslims who do not think of zakah, and for that matter, even salah. Those who do pay zakah, specially the gentlemen with large capital holdings, do not bother to calculate strictly and thus do not pay the full zakah amount due. Then there are those who do pay the full amount of zakah due, but their doing so is mechanical, sort of getting rid of it by taking it out of their pockets and be done with. Although the Divine injunction, does not simply call for the taking out of zakah, it rather bids that zakah be paid properly and paying properly can be accomplished correctly only when it is carried to those who deserve it and who are given proprietory rights over it.
Now let us imagine how many Muslims there are who would take the trouble of finding the deserving and then arrange to have their zakah reach them? No matter how lacking in financial resources the Muslim ummah may be, but should it be that every zakah-obligated Muslim pays his zakah fully and properly, and adopts the correct method of so paying it by identifying the deserving and making sure that they receive it in their hands and as their possession, then no Muslim will ever need to get involved with interest-bearing borrowing. Of course, when it so happens that a just Islamic government comes into being and operates in accordance with rules laid down by the Shari'ah, and an Islamic Baytul-Mal is established under its aegis, and in which is deposited the zakah of amwal zahirah of all Muslims, then this Baytul-Mal can take care of the need of everyone needy. Should a situation call for a larger loan, this can be given without interest. Similarly, the unemployed can be inducted into the work force by arranging to have them run small shops and stores or by engaging them into a unit of industry. True was the remark made by some European expert who said that Muslims, if they strictly followed the system of zakah they have, will soon find that there is nobody poor and distressed in their community.
In short, just because practices of interest have spread out these days like some epidemic, it is incorrect to take for granted that abandonment of interest-based business would amount to economic suicide, and therefore, modern man is helpless when involved with interest-based dealings in business.
This much is, however, conceded that such an abandonment is surely difficult for one or many individuals unless a whole nation, or a determined major party, or an Islamic government itself resolves to accomplish this objective with full and consistent attention. But this phenomena cannot be taken as an excuse for justifying riba in principle.
What has been said here has two aims:
1. Muslim groups and governments who can accomplish this task correctly should focus their attention in this direction to free Muslims, rather the whole world, from the accursed effects of interest.
2. At least, all of us should start knowing what is right and correct in this respect. The disease should be recognized as a disease. Taking or giving interest is a sin but taking the haram to be halal is a much greater sin. At the least, this could be avoided. The practical sin does have some sort of outward benefit but this second sin against knowledge and belief, that effort be made to prove interest as halal, is greater than the first one. It is absurd and wateful as well because there is hardly any financial loss in regarding interest as haram and confessing any involvement with it as sin. Doing so will close no business down. But the confession of a crime does become fruitful when one gets the tawfiq (God-given ability) to repent at some time when one could think of ways to avoid it.
In the end, I present some ahadith of the Holy Prophet Sallallahu 'Alayhi Wasallam: Peace be upon him to further strengthen the statement of above-mentioned aims. These re-assert the same Qur'anic verses where riba has been strongly prohibited and where warnings of severe punishment have been given to those involved in it. The purpose is to bring about, at least, a sense of awakening - the realization that a sin is a sin, and the concern that something should be done to abstain from it. Perhaps, the minimum change that can come out of this is not to make two sins out of one by treating the haram as halal. Thus we shall be saved from seeing even highly righteous and observing Muslims who would spend nights in tahajjud (pre-dawn nafl salah) and dhikr of Allah (remembrance of Allah), yet when they reach their store or factory in the morning, they would not even think that, by indulging in dealings of interest and gambling, they are committing some sin!
Sayings Of The Holy Prophet (Sallallahu 'Alayhi Wasallam) About Riba (Interest)
"Abstain from the seven disasters." The people asked him: "What are they, O Messenger of Allah?" He replied: "To ascribe partners to Allah, to practice sorcery, to unjustly kill one whom Allah has declared inviolable, to take riba. (interest or usury), to exploit the property of an orphan, to escape at the time of war and to slander the chaste women who are believers, unwary."
This night I saw two men who came to me and brought me to a sacred land. We walked until we reached a river of blood, wherein a man was standing, and another man was standing on the bank of the river with some stones before him. Then the man who was standing in the river came forward, and when he intended to come out of the river, the other man threw a stone at his mouth, and turned him back to the place where he was earlier - thus he began to do the same with him whenever he tried to come out of the river by throwing a stone at him and turning him back. I asked him, "What is that which I have just seen going on?" He replied, "He is the one who used to take riba (interest or usury).
The Messenger of Allah cursed the one who accepts riba (interest or usury), the one who pays it, the one who writes it and the persons who gives witness to it, and said, "They are all alike."
There are four kinds of people about whom Allah has decided not to admit them to Paradise and not to let them taste its bliss: The one who is addicted to wine, the one who takes the riba, the one who exploits the property of an orphan and the man who is disobedient to his parents.
A dirham a man receives as riba (interest or usury) is, in the sight of Allah, more serious than thirty three acts of fornication or adultery in Islam.
The Holy Prophet Sallallahu 'Alayhi Wasallam: Peace be upon him has forbidden the fruits to be sold or purchased before they are eatable, and said, "When zina (adultery) and riba (usury or interest) become rampant in the people of a town they themselves invite the punishment of Allah."
The society in which riba becomes rampant is punished with famine, and the society where bribe is rampant is punished with horror (of others).
On the night (of Ascension: Mi'raj) when we reached the seventh sky, I looked upwards and saw thunder, lightnings and thunder-claps. Then I came accross some people whose stomachs seemed to be houses full of snakes - one could see them from the the outside of their stomachs. I asked Jibra'il: "Who are they?" He replied: "They are those who used to take riba (interest or usury)."
Abstain from sins which are not forgiven: Embezzling of the spoils, for whoever embezzles anything will come with it on the Day of Judgment, and the other sin is riba.
When a man gives a loan to a person he must not accept a gift (presented by the debtor).
To sum up, presented here were seven verses of the Holy Qur'an and ten sayings from the ahaadeeth of the noble Prophet Sallallahu 'Alayhi Wasallam: Peace be upon him which concern the definition of riba, and its nature, and point out to the disasters it brings in the world. This much is enough for a thinking and feeling Muslim. For those interested in a more comprehensive research on the subject and a more detailed discussion on the remaining aspects may see Mas'ala-i-sud, a separate book in Urdu on the problem of interest published by this humble writer.[Ma'ariful Qur'an]
