The Dangerous Trap of Riba
13 minute read
The Meaning of Riba
Riba is an Arabic noun derived from the verb Raba meaning ‘to increase’, ‘to grow’, ‘to exceed’. In Christianity it is believed that the one who consumes usury should not be shrouded if he dies, and even the Jews forbade usury. Dealing with riba is prohibited according to the Qur’an, Sunnah and scholarly consensus.
Allah forbade the consumption of non-Halal food, the meat of the swine, alcohol, and you find that the majority of Muslims do not eat or drink these forbidden things. Allah forbade a person from marrying his mother, his sister, his aunt and other close relatives, and you will almost never come across cases where Muslims have transgressed these injunctions. So why is it that many Muslims feel it is less problematic to engage with riba, to treat the issue lightly when it is just as significant, in fact more significant, than other of the major sins. You don’t find Muslims looking for concessions to make lawful the previously mentioned foods or drinks or making marriage to the previously mentioned people permissible (Halal).
Islam has forbidden riba in a manner that leaves no room for doubt concerning its prohibition. There are several Qur’anic injunctions, Prophetic traditions (Hadith), and sayings of the companions condemning and strongly prohibiting riba.
Proofs from the Qur’an
In the Qur’an, Allah does not declare war on anyone except the people who deal in riba:
“O you who believe! Observe your duty to Allah, and give up what remains from riba if you are true believers. And if you do not, then be warned of war from Allah and His Messenger…” [Qur’an, 2: 278-279]
On the Day of Resurrection, people will rise from their graves quickly, except those who engaged in riba. They will stand up and then fall down like epileptics. Whenever they will try to stand up, they will fall down because they devoured riba in this world:
“Those who devour riba will not stand (i.e. on the Day of Judgement) except like the standing of a person beaten by Satan leading to madness. That is because they say: ‘Trade is like riba,’ but Allah has permitted trade and forbidden riba. Those who after receiving direction from the Lord, cease, shall be pardoned for the past; their case is for Allah (to judge); but those who repeat (the offense) are the dwellers of the Fire. They will abide therein forever.” [Qur’an, 2: 275]
Allah promises prosperity in this world and the next to those who refrain from and cease this abominable practice:
“O you who believe, do not devour riba, doubled and multiplied but fear Allah; that you may really prosper.” [Qur’an, 3: 130]
Those who devour riba are the rejectors of faith:
“That they took riba although they were forbidden and that they devoured men’s property wrongfully. We have prepared for those among them who reject Faith a grievous punishment.” [Qur’an, 4: 161]
Wealth does not increase but decreases in the long run by dealing with riba:
“That which you lay out of increase through the property of (other) people, you will have no increase with Allah…” [Qur’an, 30:39]
Proofs from the Sunnah
Everyone who has something to do with riba, whether he is one of the main parties involved or is a middleman or facilitator, has been cursed. The companion Jabir (may Allah be pleased with him) reported:
“The Messenger of Allah cursed the one who accepted riba, the one who paid it, the one who recorded it, and the two witnesses to it.” He said: “They are all alike.” (Sahih Muslim)
‘Aun ibn Hanifa reported from his father that the Prophet (peace be upon him) had condemned both the receiver of interest and its payer. (Bukhari)
Based on this, it is not permitted to do work that involves writing riba-based contracts and conditions, paying or receiving riba, depositing it or guarding it. Generally speaking, it is Haraam (prohibited) to be directly or indirectly involved with riba in any way, shape, or form. It is also reported that the Prophet (peace be upon him) said:
“Avoid the seven sins that doom a person to Hell.” They said, “O Messenger of Allah, what are they?” He said: “Associating others in worship with Allaah (shirk); witchcraft; killing a soul whom Allah has forbidden killing, unless that is done lawfully; consuming riba; consuming the property of orphans; running away from the battlefield; slandering innocent chaste believing women.” (Sahih Bukhari and Sahih Muslim)
The ugliness of this major sin can also be seen in the following words of the Prophet (peace be upon him):
“There are seventy-three types of riba, the least of which is as abhorrent as a man having intercourse with his own mother and worst of which is [violating] a Muslim’s honour and sanctity.” (Al-Hakim)
Samurah ibn Jundub (may Allah be pleased with him) reported that the Prophet (peace be upon him) saw in his dream a man standing in a river of blood. On the riverbank stood a man who had with him stones. Each time the man in the river wanted to come out, the man with the stones would throw a stone into his mouth which drives him back to his position. The Prophet (may Allah be pleased with him) asked about this man in the river at which he was informed he was a man that dealt with riba. (Sahih al- Bukhari) During the Israa’ (the ascension), the Prophet (peace be upon him) passed by a group of people, whose stomachs were like that of houses. In these houses were snakes that could be seen from the outside. So the prophet asked Jibreel (Angel Gabriel) about them at which he said: “They are the ones who deal with riba.” (Ahmad)
The prohibition of riba does not just apply to deals between the rich and poor. It is a general prohibition that applies to every person and every situation. Indeed how many rich people and big businessmen have gone bankrupt because of riba! The least harm that riba does is to destroy the barakah (blessing) of the money, even if a person’s wealth is great. The Prophet (may Allah be pleased with him) said:
“Even if riba is much, it will end up being a small amount.” (Al-Hakim)
This does not refer to whether the ratio of interest is high or low; all riba is haraam (prohibited), and the one who deals with it will be raised up on the Day of Resurrection like the one who stands beaten by Satan as per the verse cited earlier.
Sayings of the Companions
Imam Adh-Dhahabi in his book, “The Major Sins” narrates some of the statements of the companions of the Prophet (peace be upon him) concerning riba:
‘Abdur-Rahman ibn ‘Abdullah ibn Mas ‘ood (may Allah be pleased with him) reported his father as saying: “When zina (adultery and fornication) and riba appear in a place, Allah orders its destruction.”
Abu Bakr (may Allah be pleased with him) said: “The one who takes and the one who gives riba will go to the fire.”
Why Islam Prohibits Riba
The Prohibition of riba in Islam has its origins in the Qur’an and the authentic traditions (hadith) of Prophet Muhammad (peace be upon him). It is based on Allah’s infinite wisdom that He deems an action as obligatory or prohibited. After pondering over the texts concerning riba in both the Qur’an and Sunnah, Muslim scholars have given several reasons and suggestions as to why Allah may have enforced such laws on the Muslims.
The following are some reasons proposed by Muslim Scholars:
- Riba is a sure gain without any possibility of loss, hence all the risk is taken by the borrower, rather than sharing the risk and the profits.
- Riba retards economic growth and development.
- Riba is one of the major contributors of inflation.
- Riba negates the culture of brotherhood and sympathy.
- From a moral and spiritual point, riba is clearly based on greed, selfishness, parsimony, narrow-mindedness and hard-heartedness. It nurtures the same evils in the money lender
Types of Riba
There are many prophetic traditions (hadith) of the Prophet (peace be upon him) that inform us of the types of riba practiced during his time. These practices are of two types – Riba Nasia and Riba al-Fadl.
Riba Nasia – Interest on Debt
This type of riba was quite widespread and well-known during the time of the Prophet (peace be upon him) and was practiced in a variety of ways:
- The creditor would lend money to a debtor for a fixed period of time. When the time had expired and the debtor was unable to pay the debt, he was allowed more time to repay it on the condition that he would repay more than the principal.
- The creditor would lend a debtor money for a fixed period of time at a determined rate of interest to be paid monthly. When the time had elapsed the debtor returned the principal to the creditor.
- The creditor would lend a borrower money for a fixed period of time at a determined rate of interest to be paid together with the principal on the expiration of the time.
Note how the first point is what many Muslims today fall for – the much-publicised “interest-free” offers. These offers are a pure form of riba nasai. If the full loan amount is not repaid within the specified term, interest is then charged on the full loan amount.
1. Late Fees and Credit Cards
Similarly, charging late fees for overdue payments falls under riba nasai. Therefore, it is prohibited (Haraam) to charge an excess fee for late payments. If a person knows that they will be forced to pay an extra amount of money for an overdue invoice, they should ensure prompt payment to avoid paying an amount which constitutes riba. Credit cards which allow for an interest free period falls in under this category. What must be remembered is that the contract taken out for such loans remains an Islamically void contract, because of the stipulation of riba within it, and the ease through which interest will be paid, hence making the Muslim liable for the punishment for their heinous sin.
2. HECS
Of particular concern also is the HECS system, which allows a student to borrow from the government to pay for his or her course fees, “interest free”. In reality, the amount is indexed to the level of inflation, which according to Islamic law, does not differentiate it from being classified as riba.
Riba Al-Fadl – Interest in Trade
This type of riba is the payment of an addition by the debtor to the creditor in the exchange of commodities of the same kind, such as money for money, flour for flour, rice for rice, etc. The Prophet (peace be upon him) said: “Gold is to be paid by gold, silver by silver, wheat by wheat, barley by barley, dates by dates, and salt by salt, like by like, payment being made on the spot. If anyone gives more or asks for more, he has dealt in riba. The receiver and giver are equally guilty.” (Sahih Muslim)
An example of riba Al-Fadl is found in the hadith collected by Bukhari:
“Once Bilal brought Barni (a kind of dates) to the Prophet and the Prophet asked him, ‘From where have you brought these?’ Bilal replied, ‘I had some inferior type of dates and exchanged two Sa’s of it for one Sa’ of Barni dates in order to give it to the Prophet to eat.’ Thereupon the Prophet said, ‘Beware! Beware! This is definitely Riba (usury)! This is definitely Riba (Usury)! Don’t do so, but if you want to buy (a superior kind of dates) sell the inferior dates for money and then buy the superior kind of dates with that money.’”
The nature of both types of riba are almost identical. Riba Nasia has been practiced when more money is paid for less money. While on the other hand, Riba Al-Fadl entails more money, gold, cereals, grains or fruits, etc. are paid in exchange for less.
Ruling on taking out a riba-based loan out of necessity
Some scholars have given an Islamic ruling (fatwa) that when a situation becomes too difficult and over-bearing, that a Muslim may engage in riba-based transaction when they enter into a state of “adversity” or “necessity” (Daroorah). However, this issue is very sensitive as many Muslims, out of their ignorance, mistreat this rule. For example they neglect the principle which says: “The state of necessity should be dealt with in proportion to its measure.” Therefore it is very important to mention the constraints and conditions under which the rule of necessity is applicable. Some of these are: That the level of harm associated with the unlawful action be less than that caused by the state of necessity. That the permissible degree or amount of the unlawful action he is allowed to commit be just enough to get him out of the state of necessity. That there is no other alternative in facing the state of necessity other than committing the unlawful act. That the duration of the concession be restricted to the duration of its cause. · That the necessity is actually existing and not only anticipated or expected. When someone is faced by necessity and all its conditions and constraints are observed then the unlawful thing becomes lawful to him. It is the duty of Muslims everywhere to strive to find lawful alternatives to alleviate the state of necessity (Daroorah) and save themselves from the need to adopt unlawful ways.
Home Loans
Of main concern here is Muslims acquiring home loans, citing the case of necessity. The case of necessity for purchasing a house does not exist in Australia, as a Muslim can find accommodation through renting, and cannot use personal fear of future events as an excuse. In this scenario, we could make all sins into cases of Daroorah. Furthermore, there is no definitive proof that we could use such an excuse in front of our Creator on the Day of Judgement, and avoid the horrific punishment mentioned earlier. Once a home loan is acquired, the heart becomes hard through disobedience to Allah’s commands, and it becomes easier to accept other forms of riba.
Concluding Words
Money or property acquired through unfair means are positively unclean and unlawful. Anyone who makes use of it or spends it on his needs does himself great harm.
The Prophet (peace be upon him) narrated about a man undertaking a long and tedious journey. His hair is disheveled and his body is covered from head to foot with dust. He raises his hands towards the heavens and cries out in supplication saying: “O Lord! O Lord!” whilst his food, drink, clothing and nourishment has been brought upon what is prohibited. The Prophet (peace be upon him) said “How can his prayer be granted when such is the case?”
In another hadith, the Messenger of Allah (peace be upon him) said:
“The flesh gathered on one’s body by means of unclean earning deserves to be thrown into the fire of hell.”
Remember, the one who transgresses the limits set by Allah is ultimately wronging himself and is in danger of being thrown into the Hellfire. Allah Most High says:
“And whoever transgresses the set limits of Allah, then indeed he has wronged himself.” [Qur’an, 65: 1] “And whoever disobeys Allah and His Messenger, and transgresses His limits, He will cast him into the Fire, to abide therein; and he shall have a disgraceful torment.” [Qur’an, 4: 14]
And Allah knows best.