Riba'

WHICH IS THE MOST DANGEROUS FORM OF RIBA?

Since Allah, the Wise, has chosen to highlight only one form of riba by mentioning it in the Qur'an, then clearly that must be the most dangerous form of riba in the sense of having the capacity for inflicting maximum damage on mankind.

That form of riba is 'lending on interest'. And it is precisely that form of riba which has embraced all of mankind today in its venomous deadly embrace. Perhaps one of the reasons why it is the most dangerous form of riba is because it has been legalized.

Islam’s View Of Trade

Interest is not a subject without trade and commerce. Islam recognizes trade and commerce not only as a lawful profession but also as a moral duty. Islam has laid down a complete set of rules for trade. The reason for these rules is to specify what halal earning is. There are many traditions (Ahaadith) concerning halal provision that can also be found in the books containing the traditions of the prophet (peace be upon him). Actually, Islam has encouraged men to earn their own provision and to provide it to their families. The condition is that the earning has to be according to the conditions set by the Shari’ah. Any sort of transaction that does not correspond to the rules of trade will not be allowed. These rules can be found under the heading of trade in the books of jurisprudence. Interest is amongst those conditions which all dealings must be free from.

How Is Interest Illegal

The definition of interest has already been mentioned as well as that it is prohibited. If we explore the Qur’an we will come across at least four places where Allah has mentioned interest.
The first one is in Surah Al-baqarah verse no.275

"Those who devour usury will not stand except as stands one whom the Satan by his touch has driven to madness. That is because they say, "trade is like usury", but Allah has permitted trade and has forbidden usury",

In the next verse verse 276 in the same place he says,
"Allah will deprive usury of all blessing, and will give increase for deeds of charity, for he does not love any ungrateful sinner."

Two verses later in verse 278 he says,
"Oh you who believe! Fear Allah and give up what remains of your demand for usury if you are indeed believers."

In verse 279 he says,
"If you do not, take notice of war from Allah and his Messenger sallallahu alaihe wasallm but if you repent you shall have your capital sum. Deal not unjustly and you shall not be dealt with unjustly."

REPAYMENT OF LOAN WITH AN EXTRA AMOUNT PERMITTED

An extra sum can be added by a borrower, to the principal sum borrowed, at the time when a borrower is repaying a debt. Such an extra sum, however, has to be freely offered, i.e., it must not have been stipulated as a condition of the loan, and, as such, would not constitute 'interest' or riba. We learn this from the fact that the Prophet himself acted in that way when repaying a loan:

Jabir said: 'I came to the Prophet while he was in the masjid, so he said: Pray two raka'ahs of prayer. Then, since he owed me a debt, he paid me and even gave me more (than was due). [Bukhari]

In order for any increase over and above the capital sum lent to be recognized as riba, that increase would have to be a condition of the loan.

HOW MUCH INTEREST CONSTITUTES RIBA?

In the very last revelation of the Qur'an (2:278) Allah ta'ala addressed all those who still had riba due to them (from loans extended prior to the prohibition of riba) and ordered them to give it up (or write it off). In the event that such people were to heed the divine command and make repentance (tauba) then, Allah declared, they would be entitled to the return of only the principal sum which had been lent. Allah did not say that they would be entitled to the return of the principal sum plus a service charge, or plus a reasonable amount of interest.

Thus it matters not whether interest is small or large (1% or 25%), it would still be riba, and would still be prohibited. In this respect riba is like alcoholic beverages. Whether the glass contains a small drink of whiskey, or whether you are offered a large drink, it makes no difference, it would still be prohibited in Islam.

In fact riba includes any material benefit above the capital sum lent, which a lender may derive from a borrower. Banks don't lend money for blessings. Nor do they charge interest for the purpose of recovering losses sustained through inflation. They do it for profit! And what enormous profits do they make! Thus economic credit, 'the creature of modern banking' is most definitely riba, regardless of whether the interest-rate is high or low or compound or simple!

Thus the Prophet said:

Anas ibn Malik reported that the Messenger of Allah said: 'If you give a man a loan and he were to offer you a meal, do not eat it, because that is riba! - unless he used to invite you for meals prior to the loan, in which case you may eat.' And again he said: 'If you give a man a loan and he offers you a ride on his animal, do not take it, because that is riba! - unless he used to offer you rides on his animal prior to the loan, in which case you may take it.' [Sunan al-Bayhaqi]

Anas bin Malik also reported the Prophet as saying: 'If a man extends a loan to someone, he should not accept a gift' (i.e., he should not accept a gift from the debtor while the loan is still outstanding, but may do so after the loan has been repaid to him). [Bukhari]

WHAT CAN WE DO WITH RIBA MONEY?

Some scholars have felt it necessary to advise Muslims living in non-Muslim lands not to leave their riba earnings in the hands of non-Muslims. They advise that such riba money should be accepted and then given in charity. The terminology which they use is suspicious! The shariah (i.e. the sacred law) does not address 'non-Muslim lands'. It recognizes dar al-Islam and dar al-harb. Imam Shafe'i recognized such territory which was in a state of contractual peace and non-aggression with dar al-Islam as dar al-ahd.

What, then, can a Muslim do with riba money?

Since the enemies of Allah are waging war against us and against all of mankind with riba, we may, perhaps, be permitted to use riba money to oppose riba! We may thus use riba money to publish books such as this one, on the prohibition of riba in Islam, and then distribute them to the public free of charge. But Allah knows best! I may be wrong!

RIBA AND THE DOCTRINE OF NECESSITY (DARURAH)

Dr. Jamal Badawi, the learned scholar of Islam, rejects the opinion regarding the admissibility of the use of riba loans for housing etc. in USA, on the basis of the application of the doctrine of necessity (darurah). His position is that 'necessity' does not apply in the general conditions obtaining here today. It can apply only in specific conditions which are rare in USA today.

Such would be the case of a family of ten who cannot afford to buy a house and cannot obtain a house or apartment on rent. Nor do they have anyone who can help them with shelter. Such a family, faced with the prospect of being turned out onto the streets, are legitimately entitled to invoke the doctrine of darurah.

If darurah is invoked then there remain the further conditions that there must be an absolutely minimum use of riba, and it must be for the minimum time possible.