Riba (Usury and Interest)

[bamalli]

Riba (Usury and Interest)
According to Quran and Sunnah


Defining the Problem


Riba (Usury) is of two major kinds:

1.
Riba An-Nasia - Interest on lent money

2.
Riba Al-Fadl - Taking a superior thing of the same kind of goods
by giving more of the same kind of goods of inferior quality,
eg.,dates of superior quality for dates of inferior quality in
great amounts.


The definition of Interest, the literal meaning of interest or
Al-Riba as it is used in the arabic language means to excess or
increase. 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. Riba has been
described as a loan with the condition that the borrower will
return to the lender more than and better than the quantity
borrowed.

As muslims, our main concern when it comes to financial
transactions is to avoid Riba in any of its forms, despite the
fact that the basic foundation of the world economics and finance
today is that of riba and dealing in usury.

The Prophet [peace and blessings be upon him] has foretold us
of a time when the spread of riba would be so overwhelming that
it would be extremely difficult for the muslim to avoid it. This
situation calls for muslims to be extra cautious before deciding
on what money payment of financial methods to use in any personal
or business transaction.

To make sure that we are safe from Riba, we have to learn which
transactions lead to it.



Interest in Pre-Islamic Times



HafizIbn hajr writes in his commentary of Sahih Bukhari (Fathul
Bari), Vol. IV p.264:

Imam Malik reports on the authority of Zaid Ibn Aslam that in the
period of ignorance (pre-Islamic times) interest was changed
according to the following scheme. One person had a right to the
property of another person. It may have been a general right
because of the amount lent or the price of something purchased or
in any other form. A time was set when the claim would be
settled.When the appointed time arrived the creditor would ask
the debtor if he wanted to settle the claim or pay interest with
an extension of time. If the claim was settled then there was no
increase in the payment. Otherwise the debtor would increase the
amount payable and the creditor would extend the period further.



Textual Evidence


Hadith - Sahih Bukhari, Volume 3, No. 299; Narrated 'Aun
bin Abu Juhaifah, r.a.

My father bought a slave who practised the profession of cupping,
(My father broke the servants instruments of cupping). I asked my
father why he had done so. He replied, "The Prophet forbade the
acceptance of the price of a dog or blood, and also forbade the
profession of tatooing, or getting tatooed and receiving or
giving Riba (Usury), and cursed the picture makers."


Hadith - Sahih Bukhari, 2.468, Narrated Samura bin Jundab, r.a.

He speaks of in a dream related to the Prophet (SAW) that there
is a river of blood and a man was in it, and another man was
standing at its bank with stones in front of him,facing the man
standing in the river. Whenever the man in the river wanted to
come out , the other one threw a stone in his mouth and caused
him to retreat back into his original position.The Prophet
[peace and blessings be upon him] was told that these people in
this river of blood were people who dealt in Riba (usury).


The Noble Qur'an - Al-Baqarah 275-281

275. Those who eat Ribâ (usury) will not stand (on the Day of
Resurrection) except like the standing of a person beaten by
Shaitân (Satan) leading him to insanity. That is because they
say: "Trading is only like Ribâ (usury)," whereas Allâh
has permitted trading and forbidden Ribâ (usury). So
whosoever receives an admonition from his Lord and stops eating
Ribâ (usury) shall not be punished for the past; his case is
for Allâh (to judge); but whoever returns [to Ribâ
(usury)], such are the dwellers of the Fire - they will abide
therein.

276. Allâh will destroy Ribâ (usury) and will give
increase for Sadaqât (deeds of charity, alms, etc.) And
Allâh likes not the disbelievers, sinners.

277. Truly those who believe, and do deeds of righteousness, and
perform As-Salât (Iqâmat-as-Salâ t), and give
Zakât, they will have their reward with their Lord. On them
shall be no fear, nor shall they grieve.

278. O you who believe! Be afraid of Allâh and give up what
remains (due to you) from Ribâ (usury) (from now onward), if
you are (really) believers.

279. And if you do not do it, then take a notice of war from
Allâh and His Messenger but if you repent, you shall have
your capital sums. Deal not unjustly (by asking more than your
capital sums), and you shall not be dealt with unjustly (by
receiving less than your capital sums).

280. And if the debtor is in a hard time (has no money), then
grant him time till it is easy for him to repay, but if you remit
it by way of charity, that is better for you if you did but know.

281. And be afraid of the Day when you shall be brought back to
Allâh. Then every person shall be paid what he earned, and
they shall not be dealt with unjustly.


The Noble Qur'an - Al-Imran 3:130

O you who believe! Eat not Ribâ (usury) doubled and
multiplied, but fear Allâh that you may be successful.


Hadith - Mishkat-ul-Masabih

The following three ahadith have been taken from
Mishkat-ul-Masabih under the section of interest and the English
translation has been taken from its English version written by Al
Hajj Moulana Fazl Karim (218-227 vol.11)

*
Hazrat Jabir r.a. has reported that the Messenger of Allah
[peace and blessings be upon him] cursed the devourer of usury,
its payer, its scribe and its two witnesses. He also said that
they were equal (in sin).

*
Hazrat Abu Hurairah r.a. reported that the Prophet [peace and
blessings be upon him] 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 [peace and blessings be upon him] said: I came across
some people in the night 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 the stomachs. I
asked :O Gabriel! Who are these people? He replied these are
those who devoured usury. [Ahmed,Ibn Majah]



Hadith - ??

Hazrat Al-Khudri radiyallahu anhu reported that the Prophet
[peace and blessings be upon him] 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 practised usury. The giver and taker are the same.



Conclusion

After reading the above, it is apparent to us that interest is
haram (prohibited) . 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 [peace and blessings be upon him] has
cursed him? As sensible people we can understand that what our
Creator has chosen for us is for our own prosperity and benefit.

Islam has encouraged men to earn their own provision and provide
for their families. The condition is that the earning has to be
according to the Shari'ah. These rules can be found under
the heading of trade in the books of jurisprudence. Interest is
amongst those conditions which all dealings must be free from.

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.