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:

I am seeking clarification on blanket condemnation of any financial transaction involving interest. I do not see how it is possible to avoid interest in any such transaction. I mean to take interest as a general term meaning 'cost of capital'. In this sense, rent is interest. Any leasing arrangement is interest. Any dividend is interest. By calling such income anything other than interest does not make it any less the 'cost of capital'.

On the other hand, usury is where one person has a stranglehold on another who is incapable of going to the market and secure capital at rate determined by competitive market conditions. In such circumstances one person clearly exploits the victim by charging a rate of interest in no way determined by market forces and the victim is unable to extricate himself from the condition he finds himself in. This is clearly evil.

Would it not be sensible to interpret riba as usury and not interest? In the USA, you are in almost total control of interest you pay because you can always refinance at a more competitive rate.

People buying their houses on a mortgage benefit by having equity in their homes and are doubly helped by government in an effort to encourage home ownership by way of tax relief in interest payments. Also the person builds wealth to pass on their children. While value of real estate generally goes up, mortgage debt remains constant.

To be sure, there is a risk associated with this. Your house can be blighted by adverse development where you end up having more debt than the value of the house. But this is a risk we all have to take. All financial transactions involve risk both to lender and borrower. If you purchase a car, you and the vendor both bet on the car functioning properly. If not both can get inconvenienced. Both take benefit of warranty. Of course, that is a type of insurance. And that is haraam too... but that is another story.   Does Quran condemn interest or usury? Is Quran clear? Who can tell?

(There may be some grammatical and spelling errors in the above statement. The forum does not change anything from questions, comments and statements received from our readers for circulation in confidentiality.)

Answer:

Interest (Riba) in the Quran

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 no one (no idol,  no person,  no grave, no prophet,  no imam,  no dai,  nobody!) worthy of worship but Allah Alone, and we bear witness that Muhammad (saws) is His slave-servant and the seal of His Messengers.

I agree with you that the Quranic term “riba” is very broad in its implications, and interest is only a part of “riba”.

This subject of “riba” is something that eminent Islamic scholars and economists have written volumes upon, so I will try and refrain from giving my opinion.    My opinion is going to be based only on what the Holy Quran and the Messenger of Allah (saws) has to say about the concept of ‘riba’.

The Quran condemns ‘riba’ or usury in extremely strong terms, and let no scholar or economist or the modern ‘educated’ muslim tell you otherwise!   

Allah says in the Holy Quran Chapter 2 Surah Baqarah verse 275-276: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 forever!   Allah deprives ‘riba’ of all blessing and develops charity, and Allah does not like an ungrateful, sinful person.

The above aayah is how clearly Allah explains the concept of ‘riba’ and the condemnation of the people who practice and propagate the concept of ‘riba’.   

For people who say that trade is just like ‘riba’, with just a different name, an example can be cited to make the concept of ‘haraam’ and ‘halaal’ clearer.    If one marries a woman and satisfies his pleasure, it is considered ‘halaal’ and is a virtue in Islam.   But if one does not marry a woman and satisfies his pleasure with her, it is considered ‘haraam’ and a huge sin in Islam.   Both satisfy the carnal pleasures of man, but the difference between them is a one-page or verbal legal contract!!   I have heard some people say, what is the difference?   But you and I both know, there is a huge difference in the reward and sin between the two acts, although both can be termed similar in many qualities.   But Allah has made marriage ‘halaal’ and fornication and adultery ‘haraam’.

Allah says further in the Holy Quran Chapter 2 Surah Baqarah verse 278:-279: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!

The above is indeed one of the strongest condemnation aayahs of the Holy Quran for the usage of ‘riba’.   We are warned of a ‘Declaration of War’ with none other than Allah and His Messenger (saws)!!!  

The Prophet (saws) said in an authentic tradition that on the Day of Judgment, some people will be given swords and ammunitions and will be ordered to pick them up.   They will ask, “why”?   And it will be said, “Pick up the arms, for today your war is with Allah and His Messenger (saws) for the ‘riba’ that you used to practice in the life gone by!”  

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)!

Thus, brother, in answer to your specific question, the Holy Quran is extremely clear in its condemnation of ‘riba’ and there should be no doubt in the believer’s mind about it.  There are some modern ‘thinkers’ who have tried to justify the current concept of interest as legal, but the Quran leaves no doubt about it in the least that ‘riba’ is ‘haraam’ and Allah and His Messenger (saws) have warned of a declaration of war against those who practice ‘riba’.   For a believer, this should be enough ‘incentive’ to stay far away from ‘riba’.

Today, the financial situations and surroundings are such that one cannot even imagine how the economy or life would function without interest  based transactions.   It has been literally injected into our blood and our life system in such a way, that it seems impossible to come out of it.   But for a believer, who believes in Allah and the Last Day, the above aayahs of the Quran from the All Wise, All Knowing, is enough evidence and warning.    For those who take these commandments lightly, they should be prepared to face Allah the All Mighty on the Day of Judgment.

I just want to share an experience with you.  Once we were attending an Islamic lecture by a renowned scholar and a modern ‘educated’ brother asked a question regarding interest.   He said that in today’s time, it is unthinkable or impossible to live without borrowing and gave a personal example where if he did not mortgage his house, he would not have a shelter for his wife and children.   He also said that without a car, he would be stranded without a job,  and thus would not be able to feed and support his family.   The scholar,  gave him an answer which was extremely interesting.   He said, “Brother, I understand your situation, but, I cannot make legal, what Allah Subhanah has Himself made ‘haraam’ in the Holy Quran.  And whatever I, or any scholar says, it is you who will have to answer for these ‘riba” transactions in the court of Allah, alone, on the Day of Judgment.   If you are confident that you can explain your case to Allah, and if you are confident that Allah will accept your excuses, please go ahead!”  Please note that in no circumstances was the scholar implying that ‘riba’ is legal in Islam, just to make the brother understand that this is between Allah and the person who practices ‘riba’ on the Day of Judgment.

I just want to add some of the guidance received from the authentic traditions of our beloved Prophet (saws) and how did he (saws) understand the above aayahs and say, regarding ‘riba’.

Allah's Messenger (saws) said, "Even though usury be much, it leads in the end to penury."

Allah's Messenger (saws) said, "Usury has seventy parts, the least important being that a man should marry his mother."

The Prophet (saws) said: “If anyone intercedes for his brother and he presents a gift to him for it, and he accepts it, he approaches a great door of the doors of usury.”(Thus, bribery is also a part of ‘riba’)

The Prophet (saws) said, "Avoid the seven great destructive sins. "The people enquired, "O Allah's Apostle! What are they? "He said, "1. To join others in worship along with Allah,2.  to practice sorcery, 3. to kill the life which Allah has forbidden except for a just cause, (according to Islamic law), 4. to eat up riba (usury), 5. to eat up an orphan's wealth, 6. to give back to the enemy and  fleeing from the battlefield at the time of fighting, and 7. to accuse chaste women, who never even think of anything touching chastity and are good believers."

(The Prophet (saws) included ‘riba’ in one of the ‘Seven Destructive Sins’. If we read the other sins which accompany the list, one can imagine what is the magnitude of the sin of ‘riba’)

Hadrat Ali ibn Abu Talib (a.s.) heard Allah's Messenger (saws) curse those who took usury, those who paid it, those who recorded it, and those who refused to give sadaqah.

The Prophet (saws) prophesied: “A time is certainly coming to mankind, when only the receiver of usury will remain, and if one does not receive it, some of its vapour will reach him.”

(Unfortunately, we live in those times today.  The Prophet (saws) said that a time will come, when even if one tries his utmost to stay away from ‘riba’, the whole society and surroundings will be so much engrossed in ‘riba’, that some of its vapour or dust will reach this pious person.)

May Allah keep us independent of everything, except Him.   May Allah help us to come out of this system of ‘riba’.   May Allah guide us to read and understand the Holy Quran so that we can keep ourselves aligned to His commandments and guidance.   May Allah guide to us the Straight Path of Islam.  Ameen.

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

Your Brother in Islam,

Burhan