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The Insanity of Riba-involvement


Q A Ahmad

"Those who devour riba, shall rise up like men whom Satan has demented by his touch. This is because they claim that buying and selling (trade) is but a kind of riba; whereas Allah has made trade lawful and riba unlawful.

"Hence, who ever becomes aware of his Sustainer's admonition, and thereupon desists (from riba), may keep what he has already gained and it will be for Allah to judge him, but as far as those who return to it - they are destined for the fire, therein to abide.

"Allah deprives riba-based gains of all blessings and blesses charitable deeds with manifold increase. And Allah bears no love with ungrateful sinners.

"As to those who believe and do good deeds, establish salat and pay zakat, they will most surely be rewarded by their Sustainer and will have nothing to fear nor to grieve.

"O Believers, have the consciousness of Allah and waive what is still due to you from riba, if you are (truly) believers. So if you do it not, then know that you are at war with Allah and His Messenger. But if you repent, you may retain your principal, wronging none (with increase) without being wronged (by suffering a loss). If, however, (the debtor) is in straitened circumstances, (grant him) a delay until a time of ease; and it would be for your own good - if you but knew it - to remit (the debt entirely) by way of charity.

"Guard against (the disgrace and the misery of) the Day when you shall return to Allah, whereupon every human being shall be repaid in full for what he has earned, and none shall be wronged."

(Quran, 2:275-281)

What is Riba?

The infinitive ribaun, in Arabic, means to increase, to enlarge. Thus, riba is the fixed increase that a lender receives from the borrower in place of the time given to the borrower for the repayment of the principal. The factor that the loan is given to a poor person or a rich one, given for funeral and burial purpose or welfare scheme or for trade and commercial business does not make any difference in receiving the increased amount over the principal. This is what is meant by riba.

Takhabbat means to wander astray just like an insane person. Hence, takhabhatahu al-shaitanu means that the Satan has maddened a person through infection. Every event that takes place in the world is by the Will of Allah, but as Allah has given permission to Satan to persuade towards evils, the evil things are attributed towards Satan. The people of impure soul fall into the clutches of the Satan who dominates their mind and intellect and they start behaving like mad persons. These people will behave insanely, raising objections over the prohibition of riba.

No difference between Profit and Interest: Wrong Theory

Like the Arab money-lenders, the bankers and money lenders of today also argue: 'When profit on capital is lawful, why should then interest on money invested in loans be unlawful?'

The argument further adds that since the debtor can invest the money in a profitable business, why not a small portion of that profit (percentage of interest) be given to the lender?

There are two flaws in the above argument. Firstly, all the debt taken may not be meant for investment. A debt can be used to fulfill some basic need. Secondly, there is no business in the whole world where there is fixed and guaranteed profit without any risk.

Let us take the simple case of a money-lender giving the money to a businessman at a fixed rate of interest. On the one hand, the businessperson devotes his time, labour, talent and his own portion of capital and works day and night. He has to bear all the risks and yet he is not guaranteed a fixed profit. On the other hand, the money-lender gets a fixed increase over his capital just sitting idle, goes on receiving an increase on his principal regardless of whether the borrower is running at a loss. Thus, by what reasoning and on what principles of logic, justice and economics is it right for the money-lender to receive a fixed amount of profit (interest)?

Further, when a loan is given to the War Fund, how could the lender receive interest at a fixed rate for a long time from his own nation, while the whole nation faces risks, bears loss and makes sacrifices?

Difference between Profit and Interest: Correct Fact

1. The purchase and sale situation involves profit. A buyer purchases a commodity he needs and the seller gets a profit for the time, labour and skill he uses in producing that commodity. Any difference in the selling price and manufacturing or buying price is the profit.

The money-lender gets that fixed sum of interest which he considers his profit. If the debtor spends the borrowed money for his personal use, he gets no profit at all. Even if he invests the money in trade, commerce, industry or agriculture, there are equal chances of profit and loss. Thus lending money at interest ends in a guaranteed and fixed profit to one party and a loss or uncertain and indefinite profit to the other.

2. The businessperson charges his profit once, however high, whereas the money-lender goes on charging interest continuously without limit.

3. The buyer pays the profit only once over and above the price of the commodity which now belongs to him, while, lending on interest, the debtor has to run a double risk - to reproduce the principal as well as its interest.

4. From a justice and moral point of view, the businessperson spends time, labor and skill to earn the profit even at risk while the debtor, without any involvement and any risk gets a fixed percentage even at risk of loss of the business.

Thus, interest, by its very nature creates selfishness, cruelty, hard-heartedness and money-worship.

Allowance to the interest taken unknowingly in the past

The interest taken previously was a sin and has not been pardoned outrightly. Here is the legal allowance that an Islamic court will not demand that it be returned. As the very amount earned is impure and unclean, to get the forgiveness from Allah, the best should be done to cleanse oneself of this impurity. One should abstain from spending on oneself, either by returning it to the to the people from whom it was received or by spending on social welfare without expecting any reward from Allah other than forgiveness. To continue enjoying the unlawful wealth, means one may be liable to punishment even for money-lending in the past.

Interest a hindrance, Charity a catalyst

Interest is a hindrance to and charity is a catalyst for the social, economic, moral and spiritual progress.

Foam a moral and spiritual point of view, charity is based on generosity, sympathy and large-heartedness while interest emerges from selfishness and money worship.

From a social point of view, if the rich take the poor as a means for exploitation, the society will gradually disintegrate. On the other hand, if the dealings are done on the basis of mutual sympathy, society shall be integrated. Charity makes the 'haves' treat the 'have nots' with sympathy, mutual love and fellowship.


1. Interest-Based Loan

a. Consumptive Loan

Helpless, needy persons borrow loans for their personal needs. Loans given on interest to poor labourers and peasants become such a great burden that the complete payments of both the principal and its interest become impossible. Naturally this situation kills interest in life. The rich become richer and the poor poorer. The depressed people become angry and develop hatred for the money-lenders, resulting in bloody revolution.

b. Economic Loan

i. The person or business that cannot pay the market rate or higher rate of interest, is unable to draw capital for the business however useful and nice it may be for the society.

ii. There is no business that can guarantee a fixed and uniform rate of profit. Nor is there guarantee against any loss in business. Hence the business that borrows capital at a fixed rate of interest can never be free of risk or loss.

iii. The money-lender, not being a partner in the business, is not interested in the welfare of the business. His only concern is his own interest. He can withdraw his money at anytime, leaving the business at any calamity.

Hence, Allah, the Almighty, the Wise, has prohibited interest-based economy and has allowed share-based, equity-based economy.

2. Charity-Based Loan

In Islam, the well-to-do of society should spend money liberally in buying their own necessities of life and those of their dependents. Then they should distribute a part of their wealth among the needy to enable them to buy their necessities of life. Then if they have more wealth, they should invest it in business on the basis of partnership or lend it without interest to the government for national service. Thus, commerce, industry, agriculture, will rise to a very high standard. The national prosperity will rise higher and higher.

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