Assalamu’alaikum
In the Name of Allah,
the Most Gracious, the Most Merciful
Indeed all praise is due to Allah, we
praise Him and seek His help and forgiveness, we seek refuge with Allah from our
soul’s evil and our wrong doings, he whom Allah guides, no one can misguide,
and he whom He misguides, no one can guide.
May the peace and blessings of Allah be
upon Muhammad the Messenger of Allah and his family and Companions and all who
follow them in righteousness until the Day of Judgment.
My Dear Brothers And sisters in Islam,
riba is yet another major sin that has found its ways in the complex society we
live in today.
Kindly spare 5-10 minutes of your
precious worldly time to read this, share with a fellow brother or sister and
the whole Muslim Umma, May the remembrance of the truth fill our hearts and may
Allah Guide us all onto the right path through his Grace and Mercy. Amin
Allah the Almighty said: “That
which you give as riba to increase the people’s wealth increases not with
Allah, but that which you give in charity seeking the goodwill Of Allah
multiplies manifold” [Al-Rum 30:39]
Riba (Interest, Usury is a very serious
economic issue in the Islamic world, and not just the Islamic world but also
Christianity and Judaism have all condemned riba.
We shall begin by defining the word
riba, its difference from Trade, its restriction in the Quran, Hadith,Bible,
the wisdom behind its prohibition and the various ways through which it can be
avoided.
Riba definition
Riba is an Arabic noun derived from the
verb Raba, meaning ‘to increase’ ‘to grow’ and ‘to exceed’.
Basically all the definitions relate to
the concept of increase or surplus. The excess originates either in one thing
itself or an increase in an exchange of commodities, services or sale of money.
Riba is also describes as an increase or excess which in exchange or
sales of a commodity or service accrues to the owner without giving in return
any equivalent, counter or recompense to the other party. This clearly shows
the two types or Riba namely Riba al
Fadl and Riba al Nasiah which as
defined also as follows.
Riba
al Fadl: - excess
accruing in sale or barter contract.
Riba
al Nasiah:-excess
accruing from a loan transaction in relation to time
Difference between
riba and trade
TRADE
|
RIBA
|
|
There is no
equality concept between the two parties. The creditor earns an excess over
the loan which is the riba, but the debtor only gets the time to finance his
business and the time does not necessary produce profit
|
|
The creditor
continues to make the interest until the debtor pays back the loans
|
|
A person lends out
his money to another party without facing any hardship or offering his
skills, he earns an income which is riba
|
|
The debtor uses the
loan he acquires from a creditor and has to pay back the same amount with an
additional amount which is the riba.
|
Prohibition of riba
in the Quran
Allah has clearly mention the prohibition
of riba in the Qur’an as clearly shown in the following verses and this will be
sufficient for those with clear faith in Allah and his Messenger.
- “…Allah has permitted trade and has forbidden riba” [Al-Baqarah 2:275]
- “O believers take not doubled and redouble riba, and fear Allah so that you may prosper. Fear the fire which has been prepared for those who reject faith. And obey Allah and the Prophet so that you may receive mercy” [Al-Imran 3:130-132]
- “Those who benefit from riba shall be raised like those who been driven to madness by the touch of the devil, this is because they say “trade is like riba” while Allah has permitted trade and forbidden riba. Hence those who have received the admonition from their lord and desist, may have what has already passed ” [Al-Baqarah 2:275]
Prohibition of riba
in the Hadith
1. In Riyadh-us-Saliheen, hadith no 1615
as reported by prominent Sheikh (Muslim), Abdullahi bi n
Mas’ud (RA) reported “The Messenger of Allah, peace be upon him, cursed the one who
accepts riba and the one who pays it" the
narration in At-Tirmidhi adds “And
the one who records it, and the two persons who stand witness to it”
2. In Ibn-Majah Volume 3 Hadith no 2274, it was
narrated from Abu Hurairah that the Messenger of Allah said: "There are
seventy degrees of usury, the least of which is equivalent to a man having
intercourse with mother”
Prohibition of riba
in the Bible
1. Thou
shall not lend upon usury to thy brother, usury of money, usury of victuals,
usury of anything that is lent upon usury.[Deuteronomy 23:19]
2. “I
consulted with myself and contended with the nobles and the rulers and said to
them“ you are exacting usury, each from his brother!” therefore, u held a great
assembly against them”[Nehemiah 5:7, new American standard bible]
The wisdom behind its
Prohibition
Some of the wisdom behind the
prohibition of riba are as follows:
- Riba is sure gain without the possibility of loss hence all the risk is taken by the borrower, rather than sharing the risk and the profit with both parties
- Riba creates a monopoly in society where the rich are rewarded for being wealthy while those who are not are forced to pay extra
- Riba conflicts with the spirit of brotherhood and sympathy
- Riba is one the major contributors towards inflation
- Riba causes trauma and depression due to mounting debts
Whole nations, dozens of them large and
small have foreign debts so large that their riba payments on these debts are a
crushing burden on the entire country, debt kills as some 11 million die each
year around the world due to conditions of poverty and debt.
Former president of Nigeria Olusegun
Obasanjo commented on the debt Nigeria faces as follows
“All that we have borrowed up to 1985
or 1986 was around $5 billion and we have paid about $16 billion yet we are
still being told that we owe about $28 billion, that $28 billion came about
because of the injustice of in the foreign creditors (lender) interest rates”
“If you ask me what the worst thing in
the world is, I will say it is compound interest”
-Jubilee
2000 news update, August 2000
During the global financial crises in
2008 and 2009, the daily Vatican newspaper, L’Osservatore Romano, reported the
Vatican as saying that the Islamic finance system may help western banks in the
crises as an alternative, The Vatican advices as follows: “the ethical
principles on which Islamic finance is based may bring banks close to their
clients and to the true spirit which should mark every financial service”
So it is clear from the above that
where a riba based market fails, Islamic financial institutions do not suffer
the same consequences since the risk is shared by both parties, lenders will be
more careful as they also share the risk of losing money if the borrower cannot
pay back the original sum.
So therefore given all the problems that
riba creates, it is no wonder Islam prohibits such a detestable act.
Various ways of avoiding riba
Living in a capitalist society makes it
difficult to completely avoid riba, this however should not be used as an
excuse to freely indulge in it, and the following are some ways through which
we can avoid riba.
- To steer clear of this evil by not taking loan which involve paying riba.
- Open up a riba free bank account.
- Not entering into contracts which stipulate riba penalties.
- Making bill payments on time so as not to incur a late penalty.
- Borrowing money from sources that do not make interest payments a condition.
- Dealing with islamically compliant bank /institutions.
- Renting a property/ service if you cannot afford to buy one without riba loans
- Accepting/organizing a “goodly loan”( al-qadr al-hasanah) which is a loan by man of which one intends to show kindness to another, which does not involve riba
With regard to the
interest that the bank has given you, do not return no consume it but rather
spend it on charitable causes such as giving to the poor or orphanage but
however, do not expect reward for this.
Remember also
brothers and sisters that most effective way of avoiding riba and determining
which transactions are permissible in our present complex society is to
consistently consult the Islamic scholars and utilizing their knowledge and
guidance with proof of the truth.
Conclusion
Riba is no
doubt haram, a major sin and no disobedience to Allah is worth the risk of his
punishment, we must remember that the life of this world is short and fleeting
as related in the following verse.“That which is on earth
we have made but for a glittering show for it in order that we may test them as
to which of them are best in conduct” [An-Kahf 18:7]
The purpose
of our existence is not to lust after beauty or wealth, but rather to worship
Allah correctly and live by his rules “The only saying of the
faithful believers when they are called to Allah and his messenger to judge
between them, is that they say “we hear and we obey” and such are the
successful” [An-Nur 24:51]
Just because riba is wide spread and
common does not make it permissible, and also remember that Allah said “And
whosoever fears Allah and keeps his duty to Him, He will make a way for him to
get out (from every difficulty) and will provide him sustenance from where he
never imagined, And whosoever put his trust in Allah, Allah is sufficient for
him” [At-Talaq
65:2-3]
May
Allah make it easy for us to live as Muslim according the Qur’an and Sunnah of
Prophet Muhammad peace be upon him and may we not be among the people that are
stated in the verse below, Amin.
"Deaf, dumb, and blind, they will not return (to the
path)" [Baqra 2:18]
Kindly note that any mistake in the contents of this article is due to my imperfection as a human being as only Allah Subhanahu Wa-Ta'ala is perfect in all affairs.
May Allah Forgive us our sins, guide us right from the evil of insincere intention, save us from misguided knowledge and grant the entire ummah benefit from this work AMIN.
Kindly feel free to make comments, contributions or corrections where necessary.
May Allah Bless us all, AMIN
Kindly note that any mistake in the contents of this article is due to my imperfection as a human being as only Allah Subhanahu Wa-Ta'ala is perfect in all affairs.
May Allah Forgive us our sins, guide us right from the evil of insincere intention, save us from misguided knowledge and grant the entire ummah benefit from this work AMIN.
Kindly feel free to make comments, contributions or corrections where necessary.
May Allah Bless us all, AMIN
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