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UNDERSTANDING "RIBA" (Usury) - Revised - September 2007 The Prohibition of RIBA
(Usury) in the Qur'an is an admitted fact, but can this term Riba be
applied equally with all certainties, upon the borrowers and the lenders, when
the dealings are based upon lawful simple "Moderate Interests"? Note: As we shall soon discover
that Riba (Usury)happens to be one of the most difficult subjects for the last
1400 years, for Muslims as well as for the Muslim Scholars. Hence, I appeal to
my readers to read the entire article, understand the various issues with an
open mind and then make their own decisions... THE VERSES OF THE QUR'AN: Here are few verses on the
subject of Riba (Usury):
Those
who devour usury will not stand except as stands one whom the Evil One by his
touch hath driven to madness. That is because they say: "Trade is like
usury but Allah hath permitted trade and forbidden usury. Those who after
receiving direction from their Lord desist shall be pardoned for the past;
their case is for Allah (to judge); but those who repeat (the offence) are
companions of the fire: they will abide therein (for ever). Qur'an 2: 275. O ye who believe! fear Allah
and give up what remains of your demand for usury if ye are indeed believers. 2: 278 O ye who believe! devour not
usury doubled and multiplied; but fear Allah; that ye may prosper. 3: 130 For the iniquity of the Jews We
made unlawful for them certain (foods) good and
wholesome which had been lawful for them; in that they hindered many
from Allah's way. That they took usury though they were forbidden; and that
they devoured men's substance wrongfully; We have prepared for those among them
who reject faith a grievous punishment. Qur'an 4: 160 - 161. Another verse that speak of the
Earlier Books: That which
We have revealed to thee of the Book is the Truth, - confirming what was
(revealed) before it: for Allah is assuredly - with respect to His servants -
well acquainted and fully Observant.
Qur'an 35: 31. Examining
"Usury" in the Earlier Books: Strong's Number:
5392-HSN Here is the literal meaning of
the Hebrew root word # 5391: Strong's Number:
5391-HSN TIMING OF THE REVELATION:
Following is the translation of an important verse on Riba, verse number
30: 39 translated by Muhammad Asad and his exhaustive scholarly research
presented in the Commentary # 35. My thanks are due to the scholar and the
publishers DAR AL-ANDALUS Gibraltar and Pola Hamida Asad for the publication
The Message of THE QUR'AN by Muhammad Asad - 1980 (complete edition). Translation
by Mohammad Asad: And
[remember] whatever you may give out in usury so that it might increase through
[other] people's possession will bring [you] no increase in the sight of God 35 - whereas all that you give out in charity, seeking
God's countenance, [will be blessed by him;36] for it is they, they [who thus seek His countenance] that shall have
their recompense multiplied. Qur'an 30: 39. Below is
the noteworthy Commentary # 35 to above
verse. Please read the
entire text of it carefully: Mohammad
Asad writes; This
is the earliest mention of the term and concept of riba in the
chronology of Qur'anic revelation. In its general, linguistic sense, this term
denotes an "addition" to or an "increase" of a thing over
and above its original size or amount; in the terminology of the Qur'an, it
signifies any unlawful addition, by way of interest, to a sum of money or goods
lent by one person or body of persons to another. Considering the problem in
terms of the economic conditions prevailing at or before their time, most of
the early Muslim jurists identified this "unlawful addition" with
profits obtained through any kind of interest-bearing loans irrespective of the
rate of interest and the economic motivation involved. With all this - as is
evidenced by the voluminous juridical literature on this subject - Islamic
scholars have not yet been able to reach an absolute agreement on the
definition of riba: a definition, that is, which would cover all conceivable
legal situations and positively respond to all the exigencies of a variable
economic environment. In the words of Ibn Kathir (in his commentary on 2: 275),
"the subject of riba is one of the most difficult subjects for many of
scholars (ahl al-'ilm)". It should be borne in mind that the passage
condemning or prohibiting riba in legal terms (2: 275-281) was the last
revelation received by the Prophet, who died a few days later [cf. note [268]
on 2: 281; hence the Companions had no opportunity to ask him about the Shar'i
implications of the relevant injection - so much so that even 'Umar ibn
al-Khattab is reliably reported to have said: "The last [of Qur'an] that
was revealed was the passage [lit., "the verse"] on riba; and,
behold, the Apostle of God passed away without [lit., "before"]
having explained its meaning to us" (Ibn Hambal, on the authority of Sa'id
ibn al-Musayyab). Nevertheless, the severity with which the Qur'an condemns riba
and those who practice it furnishes - especially when viewed against the
background of mankind's economic experiences during the intervening centuries -
a sufficiently clear indication of its nature and its social as well as moral
implications. Roughly speaking, the opprobrium of riba (in the sense in
which this term is used in the Qur'an and in many sayings of the Prophet)
attaches to profit obtained through interest-bearing loans involving an
exploitation of the economically weak by the strong and resourceful: an
exploitation characterized by the fact that the lender, while retaining full
ownership of the capital loaned and having no legal concern with the purpose
for which it is to be used or with the manner of its use, remains contractually
assured of gain irrespective of any losses which the borrower may suffer in
consequence of this transaction. With this definition in mind, we realize that
the question as to what kinds of financial transactions fall within the
category of riba is, in the last resort, a moral one, closely connected
with the socio-economic motivation underlying the mutual relationship of
borrower and lender; and, stated in purely economic terms, it is a question as
to how profits and risks may be equitably shared by both partners to as
loan transaction. It is, of course, impossible to answer this double question
in a rigid, once-for-all manner: our answers must necessarily vary in
accordance with the changes to which man's social and technological development
- and, thus, his economic environment - is subject. Hence, while the Qur'anic
condemnation of the concept and practice of riba is unequivocal and
final, every successive Muslim generation is faced with the challenge of giving
new dimensions and a fresh economic meaning to this term which, for want of a
better word, may be rendered as "usury". - In the present instance
(which, as I have mentioned, is the earliest in the history of the Qur'an), no
clear-cut prohibition is as yet laid down; but the prohibition appearing in
2:275'ff. is already foreshadowed by the reference to the immoral hope of
increasing one's own substance "through [other] people's possessions',
i.e., through the exploitation of others. THE SHAR'I
IMPLICATIONS: The
above explanatory note indicates that the discord of Shar'i implications
is from the early days of Islam and not of this century or because of the
present day world economy and its dependency upon the global banking system, as
one would like to hypothesize and place the entire blame upon. The recorded
comments also inform us that although the subject of Riba is "one of the most
difficult subjects", there is a "room for difference of opinion". Due to the absence of the specific directives
on the subject from the Prophet (peace be upon him), to the Companions and the
non existence of the conclusive concurrence over a long period, there have been
varying interpretations and definitions provided by scholars for the Qur'anic
term Riba. Taking a closer look of the
above commentaries and then reading the books on the subject of Riba, one
observes that 'Umar ibn al-Khattab (r.a.), who happened to be one of the closet
Companions of the Prophet, is reliably reported to have said, as noted above: "and, behold, the Apostle
of God passed away without having explained its {Riba's} meaning to us". Whereas, on the other hand,
there are scores of Hadiths in circulation on the subject of Riba, and all
these narrations claim to have originated from the Prophet and surprisingly
were unknown to Umar ibn al-Khattab (ra). THE TRANSLATED TEXTS:
There are varying interpretations of the Arabic word Riba but there appears to be unanimity
in rendering its translation in English. Almost all the translators of the
Qur'an, Muslim as well as the non-Muslim, have translated the Arabic word Riba as "Usury". One may
tend to argue that it is the "modern parlance". One cannot overlook
the fact that the Qur'an was translated into English for the first time in the
17th century. However, the translators while undertaking their works were well
aware of the historical times and circumstances under which these Revelations
came to the Prophet. In one of the most widely circulated translation of this
century and published from Saudi Arabia, viz., The Noble
Qur'an in the English Language the word Riba is
interpreted, under the Glossary of the Arabic words, as
"Usury". u-su-ry:
n. , pl. -ries [ME usurie < ML usuria < L usura < usus] the act or practice of lending
money at a rate of interest that is excessive or exorbitant esp. at a rate of
interest higher than is allowed by law
The next important question is; Does this literal translation of the English
term "Usury" and its interpretation as such has any support in form
of a Declaration by a Mufti or a recorded comment by a Muslim Scholar? The
answer is; Yes. Here is a passage from 'The
Concise Encyclopedia of Islam' by Harper & Row, Publishers, Inc., San
Francisco, under heading Riba: Today
the prohibition is hardly observed in any Islamic country. Either it is simply
disregarded -- the Egyptian Mufti Muhammad 'Abduh once declared "moderate
interest" lawful -- or it is referred to by some such euphemism as
"commission". Note:
The said
Declaration was made in the late nineteenth century, after the French
Revolution, by Shaikh Muhammad 'Abduh, the Rector of Al-Azhar University,
Cairo. upon his return to Egypt from Europe. It is quite
often mentioned, supported by the narrated reports coming from the Prophet,
that the taking or devouring of any sum of money as "an increase"
(interest) upon the capital, wealth or investment is Haram and a sin
worse than the rape. Any excess on the capital is riba and therefore there can
be no distinction between the reasonable and exorbitant rates of interests.
Furthermore, it is reasoned that since the verses of the Qur'an prohibits
"devouring", anyone who partakes in any transaction that involves
Riba has also committed the sin of Riba. In other words, not only the
"taking" but also the "giving" of "Interest" is
prohibited. The borrowing of money on interest for buying a house, a car, etc.;
taking of interest bearing loan for the education; paying of interest on a
credit card or a department store shopping card, etc., are all Haram. It
is also reasoned that anyone that abets, encourages or associates himself with
such acts or transactions is also committing the sin of Riba. Hence, the
administrating, guaranteeing or witnessing, as a third party, of any legal or
banking document or contract that involves Riba (Usurious or Simple Interest),
is prohibited. There are also recorded texts within these books on the subjects
of Riba that prohibits the shop-keepers, businessmen, professionals etc., from receiving
payments through the credit cards. The reasoning given is; If the credit
card holder (could be a Muslim or a non Muslim) pays interest to the credit
card company on the sum owing for that particular purchase or service received,
then all the parties to the transaction share the responsibility. In some
books, Muslims are discouraged from having a job at institutions like the
Commercial Banks, Mortgage Companies and even the Stores wherein the duty is of
handling the Credit Cards. One scholar even goes further and claims that the
Law of Riba is applicable to "everyone" upon this earth, because the
Qur'an has been revealed by Allah for the "entire mankind" and for
all times. PROPHET HIMSELF PAID In the Sahih
Al-Bukhari, under Hadith number 3:579 (in ALIM CD), in the printed version of
Al-Bukhari Volume 3, Book 43 (The Book of Loans), Hadith Number is 2394. Here
one can read the Arabic and English Text. Narrated by Jabir bin Abdullah it is
recorded that the Prophet repaid his debt that he owed Jabir plus he gave him
"an extra amount". The scholars who do advocate "zero
tolerance" explain; A borrower is permitted to pay an "extra
amount" to the principal sum borrowed, while repaying his debt, provided
it is given of his own free will and is not stipulated as a condition of the
borrowing. Such a payment is neither Interest nor Riba. THE LAW OF NECESSITY:
Under certain prescribed circumstances the prohibited things become
permissible. Even a Haram food becomes Halal, if there is
"dire necessity". That proves; in Islam there are exemptions to the
Shari'a Laws depending upon the gravity of the necessity since Allah does not
want His creation to bear a burden that it cannot. The questions often posed
are: Does the paying of a basic normal interest on a Government Loan for
Education by a deserving student who cannot continue his studies without such a
borrowing or by an employee whose job requires a car and the wages offered
include a car allowance but the car has to be purchased from a bank loan,
constitute as the grave necessities of life? Can cases similar to these from
our daily lives be also qualified as the grave "necessities" of life?
The question is: Who can be the judge of such "exemptions"? And,
where does he draw the line between the honest necessity and the deceitful
circumventing? ISLAMIC BANKING & MUDARABAH: Is there anything as
"zero percent" banking? When an "Islamic" co-operative bank
or a housing society purchases any article, commodity, property or the title against
cash payment and then sells it at a higher price on credit as a
"co-investor" or "sleeping partner", it is called "Mudarabah"
(to sell at a profit). 'The Concise Encyclopedia of Islam',
published by Harper & Law, Publishers, Inc., describes it as: To
stay within the letter of the religious law and soothe consciences, some banks
offer the solution of mudarabah (sleeping partnership): this defines the
placing of capital as a co-investment, which naturally brings a return to both
parties.
Some scholars call such arrangements as an alternative to Riba. Others,
call it an attempt to circumvent the Riba. The proponents of the schemes
may argue that since there is a trade agreement on the "new price",
between the buyer and the seller, and the element of risk is involved as
"co-investor", such transactions are Halal. Even
"if" that be the case, how many such "zero percent" banks
are there that can meet the needs of the Muslim families around the world? What
about the other needs for borrowings, such as; the educational loans, medical
emergencies, natural calamities, etc.? There are "Islamic States"
that collects the Zakat money from its Citizens as their Trustees and
many of them also borrows large funds from the World Bank or International
Monetary Funds, on "Interest". Are the citizens of those States
collectively or individually responsible for such MEGA Deals on Long Terms
involving large sums of Interest Payments? It is recorded that even the Ottoman
Banks used to charge and pay interest... Finally, I wish to repeat what
was stated at the beginning of the article: Note: Riba happens to be one of
the most difficult subjects for the last 1400 years, for Muslims as well as for
the Muslim Scholars. Hence, I would appeal to my readers to read the entire
article, understand the various issues with an open mind and then make their
own decisions. Allah Knows The Best... |
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