INTEREST OR RIBA

DR. SM ALAM
(feedback@pgeconomist.com)

Sep 6 - 12, 2010

Interest or Riba means increase, addition, expansion, gain, multiplication, accumulation in growth and normally refers to the additional or extra income in form of profit, which lender recovers from the borrower according to a fixed rate over and above the principal amount.

According to Quranic illustrations, Riba may be interpreted to include an addition to the principal amount for a particular time limit. The official interest rate (or usury) presently in the country is 13 per cent, which borrowers have to pay to the concerned quarters.

The Quaranic and the Prophetic Traditions prohibit riba; the collection and payment of interest is commonly called usury in Islamic discourse. This prohibition is strict, absolute and unambiguous. Interest, in fact, is fundamentally repugnant to the sprit of Islam. Islam does not permit at all the charging of interest on consumption loans as these loans are taken by needy persons for meeting their essential consumption needs. The charging of interest on such loan amounts to exploitation and Islam opposes this exploitation in all forms. Theoretically speaking, there is no concept of loans and credits in Islam.

The details description of riba or interest stated in different Surahs of the Holy Quran are given below:

1. Surah Al-Baqarah 2, Madani, Verse No. 275: Those who subsist usury shall not stand before Allah except as stands one whom Satan has driven to madness. That is so because they say: Trade is just like usury only. But Allah has permitted trade and forbidden usury. After receiving the admonition from his Lord whoso desist, he shall retain the past. And his case is with Allah. And those repeat, shall be companions of the Fire to abide therein permanently.

2. Surah Al-Baqarah- 2 Madni, Verse No. 276: Allah obliterates usury and increases charity and Allah does not love the ungrateful sinner.

3. Surah Al-Baqarah- 2 Madni, Verse 278: O you who believe! Fear Allah and give up what remains of usury, if you are indeed believers.

4. Surah Al-Baqarah -2 Madni, Verse 279: But if you do it not, then beware of war from Allah and His Apostle; and if you repent, you shall back your principals; do not wrong (others) and you shall not be wronged.

5. Surah Al-Imran 3 Madni, Verse 130: O you believe! Devour not the usury multiplied manifold; and fear Allah so that you may be farewell.

6. Surah An-Nisa 4 Madni, Verse 161: And they took usury, though they were forbidden the same and because they consumed people's property wrongfully; and We have prepared for the disbelievers among them a grievous torment.

7. Surah Ar-Rum 30 Makki, Verse 39: And whatever you give as interest to increase the wealth of people, it does not increase with Allah: and whatever you pay towards the obligatory charity seeking approbation of Allah, it is they who are to increase manifold.

Allah does not bless usury. He decreases the property acquired by means of usury. On the other hand, He blesses alms and increases the property acquired through resources on which alms have been given. Allah does not love those sinners who, in spite of the divine favors of admonition and riches continue to receive interest and consider it legally valid. That reflects rank ingratitude plus contumacious sinfulness on their part.

PROPHETIC TRADITIONS

i) On the night of Ascension the Prophet (PBUH) noticed some persons with inflated stomachs. On enquiry he learnt that they used to take usury during their life time,

ii) On the day of the conquest of Makkah, the Holy Prophet announced that the entire pagan institution of usury lay crippled under his feet,

iii) Receiving usury is equivalent to 73 sins, the most minor of which is committing adultery with one's mother,

iv) Allah's curse is on those persons: who receive usury, who give it, who stand surety for its payment, who testify to it as witnesses and who write out the transaction deed about its payment,

v) Usury may temporarily increase your wealth but ultimately it will cause shrinkage in it.

From the above Quranic Verses and the Traditions of Holy Prophet Muhammad (PBUH), it is fully clear that "Interest" is totally banned item. Earning usury through banks or from any other institutions is an illegal money and useless for everyone and anyone who is doing usury transaction is not good on his part. Because the Quran has totally condemned this type of income in the strongest terms and declared it impure. Receiving interest money from any bank, centre, company, loan givers, exchange or any other source is totally illegal.

Taking interest has brought many miseries to human beings in their lives. Attacking with several diseases and calamities are due to taking interest or riba and doing bad works. In these days, people are depositing their hard cash in Banks/Financing Institutions on the pretext that the profits from such Banks/Institutions are free from usury (interest) and these institutions have also taken Fatawa with the connivance of opportunists mufties, and Alims saying that the such earnings are free from usury or interest.

Being followers of Islam, we must trust and belief only whatever our Noble Quran and the Holy Prophet Muhammad (PBUH) have ordered to follow. And there is no substitute of usury in Islam.

If we are 'Muslims' then we must obey the order of Al-Mighty Allah that what He (Allah) has stated about usury in the Holy Quran and the sayings of the Prophet (PBUH). At the end, being a Muslim, we must admit that whatever miseries and calamities have fallen upon us in these days are due to disobeying the orders of Almighty Allah and the sayings of the our Holy Prophet. If we avoid taking usury, stop telling lie, back-biting, avoiding suspicions, spying, insulting others, scoffing at others, giving nicknames, becoming slenderer and curse on the poor, then Allah will of course save us from all sorts of calamities and miseries.