DEALING WITH RIBA ( INTEREST OR USURY ) By Dr. A S Siddiqui Any increase in borrowed money with the passage of time is Riba or Usury and it is prohibited in the strongest term in the Quraan. The Quraan declares war against Usurers ( Those who deal in Riba or interest ). It asks the muslims to waive the balance of interest if they are believers. ‘Ubaadah ibn al-Saamit (may Allaah be pleased with him) narrated that the Prophet (peace and blessings of Allaah be upon him) said: “Gold is to be paid for by gold, silver by silver, barley by barley, dates by dates, like by like, payment being made hand to hand. He who made an addition to it, or asked for an addition, in fact dealt in usury [ribaa].” (Narrated by Muslim in his Saheeh). Why Riba is Prohibited Firstly, because money flows to the rich, as the needy borrow and pay the interest. Secondly, the earnings are without effort on the part of the usurer, he gets money without any effort by means of previous holdings. Further, it disturbs the money as a measure. The price of the commodities when interest is added is raised without raising their value. Thus, in a system where usury prevails, the prices are ever-rising and the value of money ever-falling, affecting reserves, savings and fixed incomes adversely. The interest thus paves the way for devaluation of money. Riba (interest, usury) is haraam wherever it exists and whatever form it takes. It is haraam for both the owner of the capital and whoever borrows it from him with interest, whether the borrower is rich or poor. Both are guilty of sin and indeed both of them are cursed. Whoever helps them in that, the one who writes down the contract and the one who witnesses it are also cursed, because of the general meaning of the aayahs and sound ahadeeth which indicate that it is haraam. It was narrated that Jaabir (may Allaah be pleased with him) said: “The Messenger of Allaah (peace and blessings of Allaah be upon him) cursed the one who consumes ribaa, the one who pays it, the one who writes it down and the two who witness it. He said they are all the same.” (Narrated by Muslim). Riba is forbidden because of the harmful effects that result from it, such as: Economic effects, e.g., keeping money idle and unproductive, and swelling the ranks of the poor; Social effects, e.g., cutting ties, creating enmity and hatred between the poor and the rich, and spreading corruption and promiscuity caused by need; Psychological and spiritual effects, e.g., arrogance, looking down on others, hard-heartedness and exploiting the needs of the poor. On the state level, countries are weakened, their resources fall under the control of others, they end up following their enemies’ desires, they are robbed of their natural wealth and their problems get even worse. This is exactly what we are seeing happening today in reality. We ask Allaah to keep us safe and sound.. The religion of Islam is the true religion which was brought by the Messenger of Allaah (peace and blessings of Allaah be upon him). It includes the most perfect laws, as Allaah says (interpretation of the meaning): “This day, I have perfected your religion for you, completed My Favour upon you” [al-Maa'idah 5:3] The sharee’ah (law) of the Qur’aan is a perfect, comprehensive and eternal law, containing all the rulings which bring happiness to people in this life and in the Hereafter. That includes rulings on matters of finance, the rulings which regulate and list the means of earning and spending money. It is not permissible to earn money in every way or to dispose of money in whatever way a person desires. In all these matters, one has to submit to the laws of Allaah, which include the prohibition on interest. Allaah says (interpretation of the meaning): Those who eat Riba (usury) will not stand (on the Day of Resurrection) except like the standing of a person beaten by Shaitan (Satan) leading him to insanity. That is because they say: "Trading is only like Riba (usury)," whereas Allah has permitted trading and forbidden Riba (usury). So whosoever receives an admonition from his Lord and stops eating Riba (usury) shall not be punished for the past; his case is for Allah (to judge); but whoever returns [to Riba (usury)], such are the dwellers of the Fire - they will abide therein. 2.275-276. Allah will destroy Riba (usury) and will give increase for Sadaqat (deeds of charity, alms, etc.) And Allah likes not the disbelievers, sinners. Truly those who believe, and do deeds of righteousness, and perform As-Salat (Iqamat-as-Salat), and give Zakat, they will have their reward with their Lord. On them shall be no fear, nor shall they grieve. 2.277. O you who believe! Be afraid of Allah and give up what remains (due to you) from Riba (usury) (from now onward), if you are (really) believers. And if you do not do it, then take a notice of war from Allah 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). 2.278-280. BANK LOANS Some of the obvious forms of riba include taking and giving interest on loans. Loans with interest are not permissible, and what is called interest in the language of the banks is riba in the language of sharee’ah. Putting money in the bank to get monthly or annual interest is riba that is haraam according to scholarly consensus. Even if it is deposited without interest, it is still wiser not to do that except in cases of extreme necessity if the bank is one that deals with interest because depositing money in the bank even if no interest is involved, is still helping them to conduct their riba-based transactions. So there is the fear that the person who does that may be counted as one of those who help others in sin and transgression even if he does not intend to do so. It is also unwise for the depositor to keep his money in a highly unstable institution which is operating only on a tiny percentage of its entire capital. The Muslim, whether he is rich or poor, is not allowed to take a loan from the bank at 5% or 15 % or more or less, because that is Riba and is a Major Sin. So we must be aware of that which Allah has forbidden and look for acceptable ways of earning and saving money. May Allaah help the Muslims to do that which will lead to their happiness, honour and salvation, and make it easy for them to work towards establishment of Islamic Banks that are free of riba-based transactions, for He is able to do that. May Allaah send blessings upon our Prophet Muhammad and his family and companions. Ibn Baaz, 4/30, 311 The Prophet said, "This night I dreamt that two men came and took me to a Holy land whence we proceeded on till we reached a river of blood, where a man was standing in the middle of river, and on its bank was standing another man with stones in his hands. The man in the middle of the river tried to come out, but the other threw a stone in his mouth and forced him to go back to his original place. So, whenever he tried to come out, the other man would throw a stone in his mouth and force him to go back to his former place." I asked, "Who is this?"I was told, '"The person in the river was a Riba-eater." ( Sahih Bukhari ) If a Muslim wants to partake in a specific affair and he does not know its rulling, then it is upon him to ask before he gets involved in it. Ignorence isn’t an excuse for each and every situation. As far as the borrowed loan is concerned, one is obliged to return the initial amount only. But if he is forced to pay the Riba which is the added amount, then he should do his best in repenting to Allah and hope for His forgiveness. Al-Qard al-Hasanah The “goodly loan” (al-qard al-hasanah), on the other hand, is the loan by means of which one intends to show kindness to another and do him a favour, which does not involve taking interest. What the banks call loans are in fact contracts of riba. Allah is Wise in His rulings because He has prescribed that which is in man’s interests in this life and in the Hereafter, and He is the All-Wise, All-Knowing. CONCLUSION Nothing is required of us except repentance and seeking forgiveness from your Lord. Note that Riba is a very serious and grave sin, seeing that Allah (subhanahu wata'ala) did not declare war in the Qur'an against anyone except the one who deals with Riba. Dealing with Riba (Interest, Usury) is Haraam according to the Qur’aan, Sunnah and scholarly consensus. So it is not permissible to do that, no matter how great the need. The fact that a person may need a house or car, or to get married, or any other need, does not give him the excuse to do something that Allaah has forbidden. The Muslim has to fear Allaah and remember that He is always watching; he should prefer the Hereafter to this life. If he finds someone who will lend him the money with no interest involved then all well and good. If he cannot find someone who will do that, then he should be patient in the hope of earning the reward from Allah. Whoever gives up something for the sake of Allaah, Allaah will compensate him with something better than that. “And whosoever fears Allah and keeps his duty to Him, He will make a way for him to get out ( from every difficulty). And He will provide him from (sources) he never could imagine. And whosoever puts his trust in Allah, then He will suffice him. Varily, Allah will accomplish his purpose. Indeed Allah has set a measure for all things.” ( 65.2-3 ) “and whosoever fears Allaah and keeps his duty to Him, He will make his matter easy for him. That is the Command of Allaah, which He has sent down to you, and whosoever fears Allaah and keeps his duty to Him, He will remit his sins from him and will enlarge his reward.” [al-Talaaq 65:5]. END