Mu' meneen Brothers and Sisters,

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One of our brothers/sisters has asked this question:

Modern day banking interest is like tijarat therefore mlolana usuf ali and alazhar university consider this halal. it is difeerenet from old age exploitative intereste=usuaaeuyry- u have to differentiate bet usuary and interst = estimated profit

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Answer:

Interest is usury is riba

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.

‘Interest’ is a nominal sum or rate charged by a creditor from his debtor for the use of his borrowed money.

‘Usury’ is an exorbitant rate of interest charged by a creditor from his debtor for the use of his borrowed money.

Although the Arabic and Quranic term ‘riba’ is normally translated as ‘usury’, in light of the guidance of the Quran and the Sunnah, we absolutely assure you that the Quranic term ‘riba’ constitutes, encompasses, and includes both, interest as well as usury.

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 ‘riba’, those who paid it, those who recorded it, and those who refused to give sadaqah.

A ‘trade’ by its very nature involves two different commodities…..One buys a kilo of rice (one commodity) for say $2.00 (another commodity)…that is a ‘trade’. If one who buys the kilo of rice for $2.00 and sells the rice for $3.00, the $1.00 is his profit in the ‘trade’, which is absolutely lawful in Shariah.

But if one buys a kilo of rice (one commodity) on loan with the promise or undertaking that after a specified period of time he will pay back the loan to the owner with two kilos of rice (same commodity)….that would constitute the abomination of ‘riba’ and not ‘trade’ in the Sight of Allah Subhanah! It absolutely does not matter if the promise or undertaking is to pay back 1.01kg of rice, or 1.1kg, or 1.5 kg, or even a 100kg of rice….as long as the undertaking is to pay back with an increase to the loan in the same commodity, it would constitute as ‘riba’ and not ‘trade’ in the Sight of the Lord!

Dear and beloved sister 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!

Respected sister in Islam, if all the so-called ‘Moulanas’ and all the ‘universities’ of the world were to tell you that only ‘usury’ (excessive interest) and not ‘interest’ alone is ‘riba’, we absolutely assure you from the clear guidance of the Quran and the Sunnah that their deduction is absolutely wrong and inaccurate! The Quranic term ‘riba’ constitutes, encompasses, and includes both, interest as well as usury, thus allow no one to convince you otherwise!

If one trusts, obeys, and follows the guidance and commands of Allah and His Messenger (saws), one can be assured of never ever being misled; but if one believes, obeys and follows any other guidance, other than that of Allah and His Messenger (saws), one can be assured of being led astray.

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