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The prohibition of ribaa is a divinely ordained matter that is supported by sound reason and the wisdom behind its prohibition is evident from the ill effects that it has on human society.

Islam espouses to protect the wealth of others as one of the five essentials on which the Islamic law is based.

Interest has been condemned in both, the Qur’aan and the Sunnah in many places. The Qur’aan very emphatically deals with the issue of interest in Soorah al-Baqarah and goes to the extent of saying that the one who deals in interest is at war with Almighty Allah. Again, the prohibition of interest is based on both the primary sources of the Islamic law, i.e. the Qur’aan and the Sunnah, which includes the following.

“Oh you, who have believed, fear Allah and give up what remains [due to you] of interest, if you should be believers. And if you do not, then be informed of a war [against you] from Allah and His Messenger. But if you repent, you may have your principal- [thus] you do no wrong nor are you wronged.” (Al-Baqarah: 278&279)

The extreme warning in the above verses is an indication of the attitude of Islam towards interest≠related transactions  The stern warning in this verse is a clear affirmation of its prohibition.

Jaabir ibn Abdullah said, “Allah’s Messenger cursed the one who receives interest and one who pays it, and one who records it, and the two witnesses; and he said: They are all equal.”

In this hadeeth, the Messenger of Allah condemns all the participants in the ribaa transaction  This serves as sufficient proof of the degree to which dealing in interest is prohibited  Dealing in interest is thus classified as a major sin¨ which places it in the same category as ascribing partners with Allah and other heinous sins like murder.

Allah has negated the perceived بركة [blessings] of ribaa. Allah says that outwardly it may seem that with interest one’s wealth is increasing, but in fact one’s wealth is really decreasing. When barakah-blessings are taken away from ones wealth, then one is like a person suffering from malnutrition, who because of being bloated outwardly looks like he is fat and healthy, but actually has nothing in his belly.

When one does not have barakah, he has outward wealth, but it does not satisfy him.

Therefore, barakah would mean that Allah makes one satisfied and contented with whatever wealth one has, even though it may be a little.

Interest has been prohibited in all religions [for example see: Deuteronomy 23:20]. The Qur’aan alludes to this in the verse,

«They [the people of the divine scriptures] dealt in interest when they were prohibited from it….» [Al-Nisaa’:161]

For the protection of wealth the sharee’ah allows the individual private ownership and to accumulation of wealth under the protection of the law. Anything that contravenes this would be disallowed in Islam  Interest deprives the majority of people of private ownership and places the wealth in the hands of a few individuals. Thus, the rich become richer and the poor become poorer, leading many scholars to view ribaa as appropriating the wealth of others.This point of view is based on the idea that a person paying interest did not receive anything of real value in return for it.

In many verses discussing the evils of interest, a comparison is drawn between ribaa and sadaqah, where the two are placed in contrast to each other. The verses below are examples of this; Allah destroys ribaa and is opposed to it; sadaqah represents a wholesome increase in wealth, blessings and rewards. The prohibition of interest reinforces the spirit of compassion that is inherent to Islam and it encourages people to be kind to each other. In the second verse below, Allah mentions that interest will not increase wealth; rather giving zakah will do that. This is contrary to what those who wish to unduly increase their wealth think.

“Allah destroys interest and gives increase for charities. And Allah does not like every sinning disbeliever.” (Al-Baqarah:276)

“And whatever you give for interest [i.e., advantage] to increase within the wealth of people will not increase with Allah. But what you give in zakah, desiring the countenance of Allah – those are the multipliers.” (Al-Room:39)

The practice of taking interest destroys the benevolence that people are supposed to show each other. The intention of loans and other such mechanisms move from assistance to that of solely money making activity. A society that encourages dealing in interest allows the powerful to prey on the weak and to benefit from their distress  This is the case were consumption loans are concerned, which is for food, drinks, clothing, and other things necessary for survival. It results in the existence of extreme socio-economic classes in the society where the rich are very rich and the poor are extremely poor. This in turn leads to numerous other social evils related to the envy and hatred that the poor have for the rich and, on the other hand, the insensitive treatment given to the poor by the rich.

In a system dependant of ribaa, potential investors in all spheres of economic activity are lured into opting for the easier option of lending money on interest. This practice is harmful to the economic system because it prevents people from being involved in economic activity that would allow others to benefit and using their wealth to this end  The eventual outcome of this would be that those who are less privileged will be deprived of the benefits of the wealthy investing their money in the economy. It is well known that for any economic system to work people need to take some type of risk to invest their money in industry, trade, etc.

This argument holds well against taking interest on productive loans, which are primarily used for business purposes.

Usury and its Effective Cause

The hadith mentioned in Lesson 16.2 describes to us the six primary examples of ربا الفضل  [Ribā al – Fadl] They are called Amwāl Ribawiyyah .اموال ربوية

They are:

  • Gold
  • Silver
  • Wheat
  • Barley
  • Dates
  • Salt

It is quite clear that if these items are exchanged for their like, they must be exchanged in the same quantities at the very same place. For example, if one had a gold plate and one wanted to exchange it for a gold spoon, they must be equal in weight and must be exchanged <on the spot’  An unequal sale or deferred sale of these items constitutes Ribā

The question that comes about is: What happens if other items [besides these six] are exchanged for their likes? For example, does this rule apply to rice?

In order to answer this question, the فقهاء  jurists› have endeavoured to find a common characteristic in these six items, which if found in other items, would give them the same ruling.

This common cause of this law is called علة الربا [Illatur-Ribā]

The eminent jurists defer considerably with regards to this علة [illah] and therefore we would mention only the view of the four famous schools of Fiqh.

The Hanafiyyah found that there were two common characteristics in these items  They were:

  • Weight
  • Volume

This means that these six goods are sold by either weight or volume. Therefore, all commodities which have weight or volume are sold or being exchanged with the same commodity will fall under the rules of Ribā’-al-fadl

The Shāfi`i yyah found the following two common characteristics

  • Medium of exchange [like gold and silver]
  • Eatables/food

Therefore, this law will apply on everything edible or having the natural ability of becoming a medium of exchange [or currency].

The Mālikiyyah identified the following two common characteristics:

  • Eatables/food
  • Preservation [can be stored]

The Hanābilah have three views;

  • Conforming to the Hanafiyyah
  • Conforming to the Shāfi`iyyah
  • Eatables sold by weight or volume

Thus, the scholars have said that if any of these characteristics are found and the items are of the same type, then it is not permissible to exchange the item in unequal quantities, or to defer the sale. E.g.: When gold is sold for gold.

If they are not of the same type but has one of these characteristics found in them, then it is permissible to exchange the two commodities in unequal amounts, but it is not permissible to defer the sale. E.g.: When silver is exchanged for gold.

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ICO’s Publications – Islamic Studies curriculum – Grade 11/ Part1 https://goo.gl/AougA8