In the name of Allaah, Most Beneficent and Most Merciful
Allah (swt) has given us the best deen, that is Islam. One who follows it completely, he will be successful in this life and in the hereafter. Islam is the perfect deen as Allah has said in the Quran and it needs no change, addition or alteration.
One of the challenges we face as muslims living in this time and age is to protect ourselves from Riba(Interest). Many muslims these days are falling into trap of Riba, either as takers or givers. I hope today’s talk which is about Riba (Interest) will serve as knowledge for the ignorant, reminder for the Allah Fearing muslims and as a warning for the heed less.
Definition of Riba
Literally Riba means Excess or Increase or Addition or Growth of something.
Def: A forced “increase of value” in “the medium of exchange” that is loaned or swapped is Riba.
Example: For example, money or grains or gold is lent out with a condition of its increased return after a stipulated time.
Difference between Riba and Trade: Trade is a transaction where minimum two different types of produce are involved; where one produce is always “the medium of exchange” and the other may be any type of goods. Riba has only one produce involved and the return is always increased.
RIBA IN THE HOLY QUR’AN
The prohibition of Riba was made in stages:
1. First Revelation (Surah al-Rum, verse 39)
And [remember:] whatever you may give out in usury so that it might increase through [other] people’s possessions will bring [you] no increase in the sight of Allah whereas all that you give out in charity, seeking Allah’s countenance, [will be blessed by Him:] for it is they, they [who thus seek His countenance] that shall have their recompense multiplied! (30:39).
2. Second Revelation (Surah al-Nisa’, verse 160 – 161)
So, then, for the wickedness committed by those who followed the Jewish faith did We deny unto them certain of the good things of life which [aforetime] had been allowed to them; and [We did this] for their having so often turned away from the path of Allah, and [for] their taking usury although it had been forbidden to them, and their wrongful devouring of other people’s possessions. And for those from among them who [continue to] deny the truth We have readied grievous suffering. (4:161).
3. Third Revelation (Surah Al ‘Imran, verses 130-132)
O believers, take not doubled and redoubled riba, and fear God so that you may prosper. Fear the fire which has been prepared for those who reject faith, and obey God and the Prophet so that you may receive mercy. (3:130-2).
4. Fourth Revelation (Surah al-Baqarah, verses 275-281)
Those who benefit from riba shall be raised like those who have 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 [from riba] , may keep past gains, their case being entrusted to Allah; but those who return to it shall be the inhabitants of the fire and abide therein for ever. (275).
Allah deprives riba of all blessing but blesses charity; He loves not the ungrateful sinner. (276).
Those who beleive, perform good deeds, establish prayer and pay the zakat, their reward is with their Lord; neither should they have nay fear, nor shall they grieve. (277).
O believers, fear Allah, and give up the riba that remains outstanding if you are believers. (278)
If you do not do so, then be sure of being at war with Allah and His Messenger. But, if you repent, you can have your principal. Neither should you commit injustice nor should you be subjected to it. (279).
If the debtor is in difficulty, let him have respite until it is easier, but if you forego out of charity, it is better for you if you realise. (280).
And fear the Day when you shall be returned to the Lord and every soul shall be paid in full what it has earned and no one shall be wronged. (281).
RIBA IN HADITH
1. From Jabir(RA): The Prophet, may peace be on him, cursed the receiver and the payer of riba, the one who records it and the two witnesses to the transaction and said: “They are all alike [in guilt].” (Muslim, Kitab al-Musaqat, Bab la’ni akili al-riba wa mu’kilihi; also in Tirmidhi and Musnad Ahmad).
2. From Samura bin Jundab(RA): The prophet SAWS narrated a dream in which two men came and took Prophet SAWS. “we proceeded till we reached a river of blood where a man was standing on its bank with stones in his hands and another man was swimming in the river. Whenever the man who is swimming tried to come out, the other man threw the stones into his mouth and forced him to go back to his original place. This happened again and again. I asked “Who is this?” and I was told that the person in the river is a Riba-Eater. (Sahih Bukhari)
3. Jabir ibn ‘Abdallah (RA), giving a report on the Prophet’s Farewell Pilgirmage, said: The Prophet, peace be on him, addressed the people and said “All of the riba of Jahiliyyah is annulled. The first riba that I annul is our riba, that accruing to ‘Abbas ibn ‘Abd al-Muttalib [the Prophet’s uncle]; it is being cancelled completely.” (Muslim, Kitab al Hajj, Bab Hajjati al-Nabi, may peace be on him; also in Musnad Ahmad).
4. From ‘Abdallah ibn Hanzalah(RA): The Prophet, peace be on him, said: “A dirham of riba which a man receives knowingly is worse than committing adultery thirty-six times” (Mishkat al-Masabih, Kittab al-Buyu’, Bab al-riba, on the authority of Ahmad and Daraqutni). Bayhaqi has also reported the above hadith in Shu’ab al-iman with the addition that “Hell befits him whose flesh has been nourished by the unlawful” (ibid).
5. From Abu Hurayrah(RA): The Prophet, peace be on him, said: “Riba has seventy segments, the least serious being equivalent to a man committing adultery with his own mother.” (Ibn Majah, ibid).
6. From Abu Hurayrah(RA): The Prophet, peace be on him, said: “Allah would be justified in not allowing four persons to enter paradise or to taste its blessings: he who drinks habitually, he who takes riba, he who usurps an orphan’s property without right and he who is undutiful to his parents.” (Mustadrak al Hakim, Kitab al-Buyu).
In this time and age, Riba has become a back bone of the economic systems of the west. It is prohibited by Allah as it is exploitation of people and wealth becomes concentrated with few.
Let us look at some situations where muslims are getting involved knowingly or unknowingly:
Bank Accounts: Muslims are allowed to keep money in banks for safety and a checking account suffices for this purpose. Having a savings account is not permissible as the money in the savings account is used by the bank to lend others and there by accruing interest. In case of dire necessity, if one has a savings account, then the interest accrued should be removed and spent on the poor without intention of reward from Allah. Allah is pure and likes pure things. All other schemes and form of deposits in banks are not permissible. They are haraam.
Credit cards: A person may have a credit card provided that he does not pay interest. If he is paying interest, then it is not permissible. One has to pay his purchases before his bill arrives so as not to get interest.
Home Mortgages and car loans: Buying homes or cars on interest is haraam. Fear Allah! Death is certain and no one knows their time of death and if a person is involved in this what will he answer Allah on the day of Judgement.
Working in Banks, Credit card companies and mortgage companies:
The primary source of income for these companies is interest. If a person is a direct employee of this company (Example: IT professional in a credit card company), he is directly involved in Sin. His earning will be haraam as well.
If a person is not employed directly but offers service to this company (Example: IT consultant who is offering a service but working for another company), then his income is halal but still he will be assisting in the sin. Allah has forbidden assisting others in sin. “but do not help one another in sin and transgression”(AlMaidah: 4). It is against the dignity of a true muslim that he assists in sin. A muslim should try to get jobs where the earnings are 100% Halal.
We should make Tauba if we are involved in any of these. Tauba is to leave the bad thing which we are doing and turn back to Allah. If a person is in debt, then he should try to repay it as soon as possible and make abundant tauba and if a person is working in an interest based institution then he should fear Allah and search for halal earning. For everyone will be asked how he earned the money and how he spent it. So Fear Allah!!
All queries should be directed to Ulema who will look at it case by case according to situations and provide fatwa about its permissibility.
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