Mu' meneen Brothers and Sisters,

As Salaam Aleikum wa Rahmatullahi wa Barakatuh. (May Allah's Peace, Mercy and Blessings be upon all of you)

One of our brothers/sisters has asked this question:

Assalam Walaykum,

Brother I have a question which is bothering me for some time now. This is regarding interest. Firstly i want to know what the term 'Riba' or 'usery' means.
Secondly if interest is earned to protect the capital from inflation, is it still haraam. For eg. Petrol
which used to cost about Rs 35 per litre, today costs around Rs 50 per litre. So now if a person do not invest and earn interest, his capital is going to be eroded in no time. So i want to know in what context is 'riba' haraam in Islam. Further where do we find a place where we get money
today which is interest free. The only institution giving interest free loan today is 'The Kardan Hasana Society' (which is in Bohra's) and that too against security. So if a Muslim requires loan where do he go?

Allah Hafiz

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Answer:

Riba is usury or interest

In the name of Allah, We praise Him, seek His help and ask for His forgiveness. Whoever Allah guides none can misguide, and whoever He allows to fall astray, none can guide them aright. We bear witness that there is none worthy of worship but Allah Alone, and we bear witness that Muhammad (saws) is His slave-servant and the seal of His Messengers.

Allah says in the Holy Quran Chapter 2 Surah Baqarah verse 274-276:

But those who devour ‘riba’ become like the one whom Shaitaan has bewitched and maddened by his touch. They have been condemned to this condition because they say, “Trade is just like ‘riba”, whereas Allah has made trade halaal and ‘riba’ haraam. Henceforth, if one abstains from taking ‘riba’ after receiving this admonition from his Lord, no legal action shall be taken against him regarding the ‘riba’ he had devoured before: his case shall ultimately go to Allah. But if one repeats the same crime even after this, he shall go to Hell, where he shall abide for ever! Allah deprives ‘riba’ of all blessing and develops charity, and Allah does not like an ungrateful, sinful person.

Allah says further in the Holy Quran Chapter 2 Surah Baqarah verse 278:

O Believers!, fear Allah and give up that ‘riba’ which is still due to you, if you are true believers. But if you do not do so, then you are warned of the declaration of war against you by Allah and His Messenger!

Allah says in the Holy Quran Chapter 4 Surah Nisa verse 161:

That they took ‘riba’, although they were forbidden. And that they devoured men’s substance wrongfully. We have prepared for those among them who reject faith a grievous punishment (of Hell Fire)!

Allah Says in the Holy Quran Chapter 3 Surah Ale-Imraan verses 130-132:

130 O ye who believe! Devour not ‘riba’ doubled and multiplied; but fear Allah; that ye may (really) prosper.

131 Fear the Fire which is prepared for those who reject faith.

132 And obey Allah and the Messenger; that ye may obtain mercy.

Allah Says in the Holy Quran Chapter 30 Surah Rome verse 39:

39 That which ye lay out for ‘riba’ through the property of (other) people will have no increase with Allah: but that which ye lay out for charity seeking the Countenance of Allah (will increase): it is these who will get a recompense multiplied.

Allah Says in the Holy Quran Chapter 2 Surah Baqarah verse 276:

276 Allah will deprive ‘riba’ of all blessings, but He will give increase for deeds of charity: for He loveth not creatures ungrateful and wicked.

Al-Tirmidhi Hadith 2829 Narrated by Ali ibn AbuTalib

Ali said he heard Allah's Messenger (saws) invoke the curse of Allah on those who took usury, those who paid it, those who recorded it, and those who refused to give sadaqah.

Dear and beloved brother in Islam, every single type, derivation, and manifestation of ‘riba’ (including usury, interest, etc.) is absolutely and categorically forbidden for the believers who sincerely believe, trust, fear, and have faith in Allah and the Last Day…..thus let no one convince you otherwise!

Your Question: Firstly i want to know what the term 'Riba' or 'usery' means.
In normal financial terminology ‘Interest’ is an amount paid or charged specifically and for the sole purpose of using borrowed money; and the term ‘usury’ is used for excessive or exorbitant ‘interest’…..make no mistake, the Arabic term ‘Riba’ envelopes and includes both ‘interest’ and ‘usury’ (excessive interest).

Your Question: Secondly if interest is earned to protect the capital from inflation, is it still haraam.

Dear and beloved brother, every single form, type, and manifestation without exception of ‘riba’….be it interest or be it usury is absolutely and categorically forbidden to those who sincerely believe in Allah and the Last Day!

Charging, or paying, or even involving or indulging oneself in the abomination of ‘riba’ for the purpose of anything, and we reiterate absolutely anything, is categorically forbidden in Sahriah.

So now if a person do not invest and earn interest, his capital is going to be
eroded in no time. So i want to know in what context is 'riba' haraam in Islam.
One is absolutely encouraged in Islam to strive through lawful means to protect not only their capital from ‘inflation’, but also to increase it….. but one is guided to earn one’s increase on their capital through lawful investments rather than protect it through the unlawful institution of ‘riba’!

Abdullah ibn Amr reported that the Messenger of Allah (saws) said: "One who becomes the guardian of an orphan with property, must trade on his behalf and not leave it passive in order to avoid depletion of the property by ‘sadaqah’.

It is indeed absolutely inaccurate to assume that one can only protect or increase one’s capital through the unlawful institution of ‘riba’; for it is indeed possible to increase one’s capital through ‘trade’, which is absolutely lawful in Shariah.

Your Question: Further where do we find a place where we get money today which is interest free.

First and foremost brother, it is not that the taking out of a loan is a birth-right of every individual; and unless and until one has to take out a loan for an absolutely genuine reason, one should strive to abstain from indulging into the wells of debt!

If one cannot find one amongst their family, friends or loved one’s to help them and give them a loan, one may approach one of the many Islamic Financial Institutions or Islamic Banks which provide interest-free loans to their customers based on the principles of Shariah.

Whatever written of Truth and benefit is only due to Allah’s Assistance and Guidance, and whatever of error is of me alone. Allah Alone Knows Best and He is the Only Source of Strength.

Your brother and well wisher in Islam,

Burhan