INTEREST OR AL-RIBA

DR. S.M. ALAM
(feedback@pgeconomist.com)

May 2 - 15, 2011

The literal meaning of Al-Riba as it is used in the Arabic language means an excess or increase or addition to or an increase of a thing over and above its original size and amount. In the Islamic terminology, interest means effortless profit or that profit which comes free from compensation or that extra earning obtained that is free of exchange.

Hazrat Shah Waliullah Dehlvi a great scholar and leader has given a very concise and precise definition of interest. He says, "Riba is a loan with the condition that the borrower will return to the lender more than and better than the quantity borrowed."

Islam recognizes trade and commerce not only as a lawful profession but also as a moral duty. Islam has laid down a complete set of rules for trade. The reason for these rules is to specify what halal earning is. There are many traditions (Ahaadith) concerning halal provision that can also be found in the books containing the traditions of the Prophet (peace be upon him). Actually, Islam has encouraged men to earn their own provision and to provide it to their families. The condition is that the earning has to be according to the conditions set by the Shari'ah. Any sort of transaction that does not correspond to the rules of trade will not be allowed. These rules can be found under the heading of trade in the books of jurisprudence.

The definition of interest has already been mentioned as well as that it is prohibited. If we explore the Qur'an we will come across at least four places where Allah has mentioned interest. The first one is in Surah Al-Baqarah Verse No.275. "Those who devour usury will not stand except as stands one whom the Satan by his touch has driven to madness. That is because they say, "trade is like usury", but Allah has permitted trade and has forbidden usury". In the next verse of 276 in the same place He says, "Allah will deprive usury of all blessing, and will give increase for deeds of charity, for he does not love any ungrateful sinner."

Two verses later in Verse 278 Allah says, "Oh you who believe! Fear Allah and give up what remains of your demand for usury if you are indeed believers." In Verse 279 he says, "If you do not, take notice of war from Allah and His Messenger (PBUH), but if you repent you shall have your capital sum. Deal not unjustly and you shall not be dealt with unjustly." In the second place in Surah Al-Imran, Verse No.130 Allah says, "Oh you who believe! Eat not Riba (usury) doubled and multiplied; but fear Allah that you may prosper." In the third place in Surah Al-Nisaa, Allah states in Verse 161, "That they took usury though they were forbidden and they devoured peoples wealth wrongfully; We have prepared for those amongst them who reject faith a grievous chastisement." In the fourth place, Surah Al-Room, Verse no.39, Allah mentions, "That which you give in usury for increase through the property of people will have no increase with Allah: but that which you give for charity seeking the countenance of Allah, it is these who will get a recompense multiplied."

AHAADITH CONCERNING INTEREST:

* Hazrat Jabir radiyallahu anhu has reported that the Messenger of Allah cursed the devourer of usury, its payer, its scribe, and its two witnesses. He also said that they were equal (in sin) (Muslim).

* Hazrat Abu Hurairah radiyallahu anhu reported that the Holy Prophet (PBUH) said: A time will certainly come over the people when none will remain who will not devour usury. If he does not devour it, its vapour will overtake him. (Ahmed, Abu Dawood, Nisai, Ibn Majah.)

* Hazrat Abu Hurairah radiyallahu anhu reported that the Messenger of Allah said: Usury has got seventy divisions. The easiest division of them is a man marrying his mother (Ibn Majah).

* Hazrat Abu Hurairah radiyallahu anhu reported that the Messenger of Allah said: I came across some people in the night of Ascension in which I was taken to the heavens. Their stomachs were like houses wherein there were serpents, which could be seen from the front of their stomachs. I asked: O Gabriel! Who are these people? He replied these are those who devoured usury. (Ahmed, Ibn Majah).

* Hazrat Abdullah bin Hanzalah radiyallahu anhu reported that the Messenger of Allah said: A dirham of usury that a man devours and he knows is greater than 36 fornications. (Ahmed).

After narrating all these verses from the Qur'an and relating all the Ahaadith it is apparent to us that interest could never be legal and halal. How could anybody even take the time out to think about a matter in which Allah has declared war on the user and his Beloved Prophet (PBUH) has cursed him.

We should deeply thank the Sahaabah radiyallahu anhu in their efforts to spread the religion as they learnt it from the Prophet. Then when the religion started to spread vastly, Allah brought about four imams who described the religion in general terms in order to make the common public understand. They spent their lives trying to put the whole religion in a collective form through the Qur'an and the Ahaadith and the concise decisions of the Sahaabah radiyallahu anum. In the case of interest, all four imams established a general rule mainly concentrating on this statement made by the Prophet.

Hazrat Al-Khudri radiyallahu anhu reported that the Prophet said: Gold in exchange for gold, silver in exchange for silver, wheat in exchange for wheat, barley in exchange for barley, dates in exchange for dates, salt in exchange for salt is in the same category and (should be exchanged) hand to hand, so whoever adds or demands increase he has practiced usury. The giver and taker are the same.

Out of the four imams, Imam Abu Hanifah has ruled that if the measurement system (volumetric or in compounds) is the same and the two items are in the same category, then they should be sold in the same amount and direct not in credit otherwise interest will be found.

Imam Shaf'ee says that if the items are valuable and could be considered food then there is the chance of interest. Imam Malik says that if the items are valuable and are edible then interest is a subject. We must have realized, giving and taking interest is unlawful. Unfortunately, the basis of many of the transactions (especially in banking and insurance), personal, or business involve interest. Thus, it is becoming increasingly difficult for the majority of the Muslims, especially those who are commercially orientated to abstain from dealings involving interest. Many of us purchase items on 'Buy now, Pay later' schemes thinking that this sort of scheme is of great benefit to us. Sadly, what we fail to recognize at the time of purchasing this 'supposed bargain' is the fact that if we fail to pay the required amount at the due time, we will be liable to pay interest.

Our advice to anyone who is involved in any form of interest is that the individual should minimize his expenditure in these dealings and if possible abstain completely from these transactions. In any case, every individual should continue to seek Allah's forgiveness. The philosophy shows that a person who takes interest does not gain anything in reality but through the explanation of the Qur'an verse, "Allah decreases interest and increases sadaqah."

Every person should take all necessary precautions in their financial and social dealings. If a person neglects in keeping a watchful eye on financial dealings, this negligence will slowly spread to other aspects of religion. The dealings of usury and interest are not only a disadvantage to us in this world but will also be a source of great discomfort and pain for us in the hereafter. The Prophet (PBUH) has informed us about the punishment that awaits those people who deal with interest: The summary of the matter is that 'interest' or 'Al-Riba' is hazardous and should be abstained from in all manners.