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:

Hypothetical Scenario: A widow has been left a fixed amount of money. No other source of income. If she does not put it in a bank, the money will soon dissapear and she will be left penniless. She puts it in a bank, she earns interest, the money lasts a longer time.

Question: Define Riba.

Is taking or giving of interest prohibited, or the concept of usury prohibited?

Thanks. 

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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 sincere believe, trust, fear, and have faith in Allah and the Last Day…..thus let no one convince you otherwise!

In normal financial terminology ‘Interest’ is an additional 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: Hypothetical Scenario: A widow has been left a fixed amount of money. No other source of income. If she does not put it in a bank, the money will soon dissapear and she will be left penniless. She puts it in a bank, she earns interest, the money lasts a longer time.

In light of the above quoted guidance of the Quran and the Sunnah, the taking of ‘interest’ would be absolutely unlawful and prohibited for the widow (or any believer) who sincerely fears Allah and the Last Day.

If the widow was left with a fixed amount of money, the ‘earning’ of interest on that money would not even be an option for her, if indeed she believes in Allah and the Last Day. She is at absolute liberty to invest that money and live off the lawful returns of her investment, or buy a property and live off the rent of that property, etc….but to place her money and ‘earn’ interest on it would be absolutely and categorically unlawful and prohibited for her, if indeed she believes in Allah and the Last Day.

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