Ar-Riba (Usury and Interest)

It’s Definition

It is the increase in things from specified wealth. It is of two types: Riba Fadhl and Riba Nasi’ah.

Riba Al-Fadhl: This is selling one type of item for the same type of item that is better in quantity. This is like selling one weight of wheat for one and a quarter weight of wheat, for example. Similarly, selling one Sa’ of dates for one and a half Sa’ of dates, or selling one ounce of silver for one ounce and one dirham of silver.

Riba An-Nasi’ah: This type of Riba has two categories. One is the Riba of Jahiliyah (Pre-Islamic Period of Ignorance). This is the type of Riba that Allah the Almighty prohibited by saying:

In actuality it is a man owing another man a debt on delayed payment. Then, when its fixed term is due, the lender says to the taker, “You may either pay me back or I will increase the amount of the debt (to give you more time).” So if he does not repay the debt, the lender increases the debt by a percentage of the wealth and he waits for another appointment of time (for him to repay it). This course will continue, until it earns him double compounded interest by passing the fixed term until it is multiplied and so on. Another type of interest of Jahiliyah was when someone lends ten dinars for the payment of fifteen dinars on short – or a long-term credit.

The (second category of) Riba An-Nasi’ah is selling something which involves Riba, like one of the two currencies, or wheat or barley, or dates for another type of dates. This is, for example, if a man sells a weight of dates for a weight of wheat for a fixed term, or a man sells ten dinars of gold for one hundred and twenty dirhams of silver for a fixed term.

Its Ruling

Riba is forbidden by the statement of Allah the Almighty:

“O you who believe! Eat not Riba doubled and multiplied.” (3:130)

“Allah has permitted trading and forbidden Riba.” (2:275)

And by His statement:

“O you who believe! Eat not Riba doubled and multiplied .” (3:130)

And the statement of the Messenger ﷺ:

“ “Allah curses the one who accepts Riba (usury and interest), the giver of it, the two witnesses of it, and the one who writes it.” (The Sunan compilers and At-Tirmithi graded it Sahih)

And his statement:

“ “One dirham of Riba that a man devours, while knowing it is Riba, is more severe (in crime) than thirty-six acts of fornication (or adultery).” (Ahmad with a Sahih chain of narration)

And his ﷺ statement:

“ “Riba has seventy-three doors. The least one (in sin) is as that of a man who sleeps with his mother. And worst form of Riba is harming the honor of a Muslim man.” (Al-Hakim, who graded it Sahih)

The Messenger of Allah ﷺ said:

“ “Keep away from the seven fatalities.”

It was asked, “What are they, O Messenger of Allah?” He
replied:

“ “Associating others with Allah, magic, taking a life Allah has made sacred – except with a just cause, consuming the wealth of Ar-Riba, consuming the wealth of the orphan, fleeing from the battlefield, and accusing innocent chaste believing women.” (Al-Bukhari and Muslim)

The Wisdom Behind its Prohibition

Among the obvious reasons behind the forbiddance of Riba, in addition to the general wisdom that is present in all of the Islamically legislated responsibilities, which is to test the faith of the servant in both action and abandoning action, are the following:

1) To safeguard the wealth of the Muslim from being
devoured through false sources.

2) Guiding the Muslim to invest his wealth in the
appropriate ways of earning that are noble and free from any fraud or cheating. It will also keep him away from everything that causes trouble and hatred between the Muslims. For example, agriculture, industry, and pure and valid trading.

3) Closing the ways that lead the Muslim to enmity of his
brother and troubling him, as well as hatred and dislike of him.

4) Keeping the Muslim away from whatever leads him to his
destruction, as the one who devours Riba is a transgressor and oppressor, whose final end will be of evil consequence.

Allah said:

“O mankind! Your rebellion (disobedience to Allah) is only against yourselves.” (10:23)

The Messenger of Allah ﷺ said:

“ “Beware of oppression, for oppression will be darkness on the Day of Resurrection. Beware of stinginess, for it destroyed those who were before you. It incited them to shed blood and treat the unlawful as lawful.” (Muslim)

5) Creating the opportunities of righteousness for the Muslim so that he may prepare for his Hereafter. Therefore, he gives a loan to his Muslim brother without any return on his loan and gives him respite for paying back his debt. He waits for his brother to be in easier circumstances and he eases things for him and has mercy upon him, seeking the Pleasure of Allah. This helps spread love between the Muslims and creates the spirit of brotherhood and sincerity among them.

Its Regulations

1) There are six basic items that involve Riba: gold, silver, wheat, barley, dates, and salt. The Messenger of Allah ﷺ, said:

“ “Gold is to be paid for gold, silver for silver, wheat for wheat, barley for barley, dates for dates, and salt for salt, same quantity for same quantity and equal for equal, payment being made on the same spot. If these classes differ, sell then as you wish if payment is made on the spot.” (Muslim)

The renowned scholars among the Companions, their successors and the Imams have made an analogy from these six basic items with anything that agrees with them in meaning and cause. That is everything by measure or weight or that is stored as food. These are like the rest of the grains, oils, honey and meats. Sa’id bin Al-Musayyab said, “There is no Riba except in what is measured or weighed, from that which is eaten or drank.”

2) Ar-Riba in these items may occur in either of three ways:

The First: One sells one kind for the same kind, getting a superior quality of it for inferior quality of the same kind. For example, selling gold for gold, wheat for wheat, or dates for dates. This is due to what Al-Bukhari and Muslim reported that Bilal, may Allah be pleased with him, brought some dates called Barni to the Prophet ﷺ and the Prophet ﷺ asked him:

“Where did you get this from, O Bilal?”

He replied, “We had some dates of inferior quality, so I sold two Sa’ of it for one Sa’ (of superior quality of dates) so that it may be given to the Prophet ﷺ for food.”

Thereupon the Prophet ﷺ said:

“ “O! (This is) the essence of Riba, (this is) the essence of Riba, so do not do so. However, if you want to buy (a superior quality of dates), then sell (the inferior quality of dates) in another transaction and buy (the superior quality of dates) with its price.” (Al-Bukhari and Muslim)

The Second: Selling one kind of item for a different kind, for example, selling gold for silver or wheat for dates, when one item is present and the other is absent. This is due to the Messenger of Allah’s statement:

“ “Do not sell from it (gold or silver) what is not present at the moment of exchange for (gold or silver) what is present .”

And his statement:

“ “Sell gold for silver if payment is made on the spot.”

And his saying:

“ “Selling of gold for silver is Riba unless it is from hand to hand, present at the time of the sale.” (Al-Bukhari and Muslim)

The Third: Selling one kind for the same kind in equal amounts, but one of them is absent and financed on credit. For example, selling gold for gold or dates for dates, equal in amount and in kind, although one kind is absent.

This is due to the Prophet’s statement:

“ “Selling of wheat for wheat is Riba unless it is from hand to hand, present at the time of sale.”(Al-Bukhari and Muslim)

3) There is no Riba with cash payment and differing kinds of items:

There is no Riba involved in a trade in which the price and the object of value differ, except if one of them is on credit and it is not of gold or silver. Therefore, it is permissible to sell gold for silver, a superior quality of it for an inferior quality. It is also permissible to sell wheat for dates or salt for barley, a superior quality of it for an inferior quality. It should be done hand to hand, meaning there is no delay in either of them (i.e. payment or receipt of the purchased merchandise).^[1] This is due to the Prophet’s statement:

“ “If these items differ, then sell as you wish if it is from hand to hand (i.e. the payment is made on the spot)” (Muslim)

Similarly, there is no Riba in selling these items for cash payment, whether present or absent, no matter the value or if the merchandise is absent. The Messenger of Allah ﷺ bought a camel from Jabir bin ‘Abdullah, may Allah be pleased with him, on a journey. However, he did pay its price until after reaching Al-Madinah. The Messenger of Allah ﷺ has also permitted advance payment in his statement:

“ “Whoever pays in advance for anything must do so for a specific measurement and a specific weight at a specified time.” (Al-Bukhari and Muslim)

This is the case when the cash payment is made in advance and the merchandise is given after a long period of time.

4) An explanation of the types of items that may involve
Riba

The items that involve Riba are of different types. According to the majority of the Companions and Imams, such items are as follows:

Gold, silver, wheat, barley, all types of dates are considered one category, legumes are of different categories, hence the bean is a category, the chickpea is a category, rice is a category, and corn is a category. All types of oils are considered one category, honey is a category, and all meats are of differing categories. Thus, the meat of camel is a category, the meat of cows is a category, the meat of sheep is a category, the meat of all birds is one category, and all different kinds of fish make up one category.

5) Foods that are free from any Riba

Riba does not effect fruits and vegetables because on the one hand they are not stored, and on the other hand, from the ancient times, they were not measured or weighed. Above all, such were not considered part of basic foodstuffs like grains and meat, concerning which there are clear authentic texts narrated from the Prophet ﷺ.

Important Notes:

1) Banks

The majority of the current banks that exist in the Islamic lands deal with Riba. Rather they are established purely upon the foundations of Riba. Therefore, it is not permissible to deal with such banks except in the case of necessity, for instance, transferring funds from one country to another. Due to this fact, it is incumbent upon the righteous Muslim brethren to establish purely Islamic banking systems that are free from any usurious dealings and interest based transactions.

Here is an outline to establish such a proposed Islamic banking system. Muslim brothers of a country should assemble and agree to establish a house called ‘community treasury’ (for deposit and distribution of funds). They should assign a person from among them who is an experienced guardian to supervise its administration and run its activities.

The responsibility of this treasury should be limited to the following:

i) Receive the deposits (preserve the trusts of the brothers)
free of cost.

ii) Loan facilities: Give the Muslim brothers loans according to their incomes and revenues against no benefit (i.e. interest).

iii) Collaboration in the fields of agriculture, commerce, construction and industry. The treasury should invest shares in every field that is capable of earning profits and gain for the treasury.

iv) Help in transferring the currency of the brothers from one country to another free of cost, if the treasury has any branch existing in the land in which the money is to be received.

v) Make account clearance from the treasury at the end of every year and distribute the profits to the shareholders, according to their number of shares in the treasury.

2) Insurance

There is no harm if people of a land from the righteous Muslim brothers form a savings box in which they all have invested shares according to their monthly incomes or according to what they agree to. Each share holder would participate in it with a specific share in which all are equal.

This special fund would be exclusively for subscribers only. In case anyone of them has suffered any natural accidents such as fire, or stolen property, or physical injury, an amount should be granted to him in order to lighten his difficulty. The following matters should be considered:

i) The shareholder should intend the Face of Allah when he
subscribes in order to obtain the reward from Allah.

ii) Limiting the amounts that are granted to such victims,
just as the shares of the shareholders are limited so that it(the insurance) will be established upon complete equality.

iii) There is no objection to increasing the assets of the fund by trading, building contracting and permissible industrial activities.

---

[1] The people of knowledge differ concerning the ruling of selling animals for animals on delayed payment. This is due to contradiction of the evidences. It has been reported that the Prophet ﷺ commanded ‘Abdullah bin ‘Umar, may Allah be pleased with him, to buy one camel for two camels to be given later. That was due to a need to do so. Likewise, it is related that he ﷺ prohibited selling animals for delayed payment. Allah knows best, but it seems that what is closest to the truth is that selling animals for animals on delayed payment is prohibited if there is no pressing necessity that calls for such a transaction. However, if the animals are present at the time of the transaction, then it is permissible to trade them, whether one type is superior to the other or not, as has been mentioned in the Sahih.

Extracted from “Minhal al Muslim” published by Dar as Salam

(NOTE: If you want to build a strong and powerful relationship with Allah, check out Islamia TV, where you can watch Islamic speakers from across the globe deliver inspiring and motivational courses. Learn more at www.islamia.tv.)