Allah has permitted trade and has forbidden usury

By Khandaker Nazneen Sultana

The literal meaning of interest is usury or Al-RIBA .In the Arabic language it means increase or excess. According to Islamic terminology any excess on the capital is Riba or interest.

Hazrat Shah Waliullah Dehlvi a great scholar and saint has given a very concise and precise definition of interest. He said: “Riba‘ is a loan with the condition that the borrower will return to the lender, more than and better than the quantity borrowed”.

Hazrat Al-Khudri (RA) reported that the Prophet (SAW) said, “Gold in exchange for gold, silver in exchange for silver, wheat in exchange for wheat, barley in exchange for barley, dates in exchange for dates, salt in exchange for salt is in the same category and (should be exchanged) hand to hand, so whoever adds or demands excess he has practised usury. The giver and taker are the same”.

 In today’s world most of the transactions are revolves around interest (Riba). Almost all financial transactions run on it.  Most of the banks, financing and mortgage organisations are based on interest.

According to the Qur’an Allah has prohibited all kinds of interest on money borrowed or lend by financial institutions or individuals.

Interest is Illegal –From the view of the Holly Qur’an

The interest is totally prohibited by the holy Qur’an and Hadith. The ayats where Allah has mentioned about interest in the holy Qur’an are given bellow:

In Surah Al-baqarah verse no.275-281, Allah says:

2.275. Those who devour usury will not stand except as stand one whom the Evil one by his touch hath driven to madness. That is because they say: “Trade is like usury,” but Allah hath permitted trade and forbidden usury. Those who after receiving direction from their Lord, desist, shall be pardoned for the past; their case is for Allah (to judge); but those who repeat (the offence) are companions of the Fire: They will abide therein (for ever).

2.276. Allah will deprive usury of all blessing, but will give increase for deeds of charity: For He loveth not creatures ungrateful and wicked.

2.277. Those who believe, and do deeds of righteousness, and establish regular prayers and regular charity, will have their reward with their Lord: on them shall be no fear, nor shall they grieve.

2.278. O ye who believe! Fear Allah, and give up what remains of your demand for usury, if ye are indeed believers.

2.279. If ye do it not, Take notice of war from Allah and His Messenger. But if ye turn back, ye shall have your capital sums: Deal not unjustly, and ye shall not be dealt with unjustly.

2.280. If the debtor is in a difficulty, grant him time till it is easy for him to repay. But if ye remit it by way of charity, that is best for you if ye only knew.

2.281. And fear the Day when ye shall be brought back to Allah. Then shall every soul be paid what it earned, and none shall be dealt with unjustly.

Surah Aal-Imran, verse no.130 Allah says:

[3.130] O you who believe! do not devour usury, making it double and redouble, and be careful of (your duty to) Allah, that you may be successful.

     Surah Al-Nisaa’ verse no.161, Allah states:

4.161. “That they took usury though they were forbidden and they devoured peoples wealth wrongfully; we have prepared for those amongst them who reject faith a grievous chastisement.”

Surah Al-Room, verse no.39 Allah mentions:

30.39. “That which you give in usury for increase through the property of people will have no increase with Allah: but that which you give for charity seeking the countenance of Allah, it is these who will get a recompense multiplied.”

Interest is dangerous: Concerning from Hadith

1.These ahaadith have been taken from Mishkat-ul-Masabih under the section of interest and the English translation has been taken from its English version written by Al Hajj Moulana Fazl Karim (218-227 vol. II)

Hazrat Jabir radiyallahu anhu has reported that the Messenger of Allah sallallahu alaihe wasallm cursed the devourer of usury, its payer, its scribe and its two witnesses. He also said that they were equal (in sin).    --(Muslim)

2. Hazrat Abu Hurairah (RA) reported that the Holy Prophet (SAW) said: “A time will certainly come over the people when none will remain who will not devour usury. If he does not devour it, its vapour will overtake him”. --(Ahmed, Abu Dawood, Nisai, Ibn Majah.)

3. Hazrat Abu Hurairah (RA) reported that the Messenger of Allah sallallahu alaihe wasallm said: “Usury has got seventy divisions. The easiest division of them is a man marrying his mother”. --(Ibn Majah)

4. Hazrat Abu Hurairah (RA) reported that the Messenger of Allah sallallahu alaihe wasallm said: “I came across some people in the night in which I was taken to the heavens. Their stomachs were like houses wherein there were serpents, which could be seen from the front of their stomachs. I asked, O Gabriel! Who are these people? He replied these are those who devoured usury”. --(Ahmed, Ibn Majah)

5. Hazrat Ali (RA) reported that he heard the Messenger of Allah sallallahu alaihe wasallm cursing the devourer of usury, its giver, its scribe and one who refuses to give Zakat and he used to forbid mourning. --(Nisai)

6. Hazrat Umar bin Al-Khattab (RA) reported that the last of what was revealed was the verse of usury. The Messenger of Allah sallallahu alaihe wasallm was taken and he had not explained it to us. So, give up usury and doubt. --(Ibn Majah, Darimi)

7. Hazrat Abdullah bin Hanzalah (RA) reported that the Messenger of Allah sallallahu alaihe wasallm said: “A dirham of usury that a man devours and he knows is greater than 36 fornications”. --(Ahmed, Darqutni)

8. Baihaqi reported from Ibn Abbas (RA) in Shuabul Iman that (as for) one whose flesh has grown out of unlawful food, the fire is more suitable for him.

Conclusion:

After narrating all these verses from the holy Qur’an and relating Hadith, it is apparent to us that interest could never be legal and Halal. How could anybody even take the time out to think about a matter in which Allah has declared war on the user and his beloved Prophet sallallahu alaihe wasallm has cursed him? As sensible people we should understand that what our creator has chosen for us is for our prosperity and wellbeing.

It is not only Haram to buy anything through interest-based financing, but in many cases, it is non-economical and painful. People who deal in interest–free transactions, they fell their life simpler and more comfortable.

We can carry on trade on interest-free (instalment) transaction. We are not alone. Allah will give Barkath in this right decision.

The opposite of usury is charity, and dedicating oneself to the service of Allah and humanity. Real prosperity lies not in greed, but in sacrifice and giving up life and prosperity for the cause of truth and to the service of mankind. May Allah bless us.

(This article have published in the ‘Editorial page’ of ‘The News Today’ on

May 20, 2006) and also you will get in the fortnightly magazine ‘Insurance and

Banking’ on 2009.