A R C H I V E S
Madinat al-Muslimeen Islamic Message Board
| Riba in Islam |
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| Asifa |
| 06/19/02 at 13:40:27 |
| [slm] In the name of Allah, the Most gracious, the Most merciful, the Most Forgiving. Most of the people in Pakistan are very concerned about the on going activities at governmental level to change our current economic system to Riba-free economic system. This information is in connection to all these activities to inform people about the seriousness of it’s prohibition. This information has been extrcated from Islamiq.com and Muslim editorial service web sites. Riba (interest) is something which we are surrounded with nowadays, and which we are prone to face in almost every type of transaction we conduct - bank loans for houses, cars or college; credit cards, savings accounts, fixed deposit bonds, and more. In spite of the great prevalence of interest, we must realize Allah's verdict on it, and the seriousness of its prohibition. Something which people perhaps do not realize fully is that each time you take or pay interest, you are committing sin worse than incest. If one is involved in a sin due to negligence or difficulty, s/he must at least regard his/her practice as a sin, and feel remorse over it. Becoming aware of the harmful effects and consequences of riba should motivate us to give up the practice and to repent from it. In addition to the sin associated with riba, which I have mentioned, you should realize that by paying or taking interest, you are – whether knowingly or unwillingly - either being oppressed and exploited, or participating in the exploitative economic system and oppressing others. In this system, wealth circulates only among the wealthy, who insulate themselves against loss, such that the poor remain poor. Interest is also again without effort, which violates the standards of decency and humanity. Even if there is some temporary worldly gain, in the long run interest ruins the economy, breeds enmity, hatred and greed, and produces even more terrible consequences in the Hereafter. "Whatever you give out in riba (or, with evil intention) to obtain increase in the wealth of people, it does not increase before Allah. But, whatever you give of charity, seeking thereby the Countenance of Allah - such shall be increased." [Surah al-Room, 39] What is riba? The word riba in Arabic means an increase, an addition or excess. In the context of the shari`ah, it refers to an increase which is obtained without anything given in return. "A najish (an agent of the seller, who falsely bids at an auction, for the purpose of pushing up the sale price of an item for others, although he himself has no intention of buying the item) is an accursed taker of riba." [Bukhari] The Messenger of Allah forbade the selling of animals [for animals] when payment was to be made at a later date. [Tirmidhi, Abu Dawud, Nasa'i,Ibn Majah, Darimi] (Due to uncertainties: death, illness, etc, disagreement and conflict may result.) The word Riba as understood from the Holy Qur'an and Sunnah, is any extra payment received over and above the principal amount, regardless of the fact that the extra amount is significant or insignificant. Islam, therefore, considers the Riba impermissible, in all of its forms. Fuqaha have given two interpretations of the word 'Riba': Riba-al-Nasia and Riba al-Fadl. RIBA AL-NASIA Riba al-Nasia is defined as: "Any lending arrangement that obligates the borrower to pay a certain extra amount over and above the payment of the principal amount against the specified deferment." It is important to note the Ayahs in the Holy Qur'an prohibiting the interest relating to Riba al-Nasia. "O you who believe, fear Allah and give up what remains of your demand for usury, if you are indeed believers". (al-Baqarah, 278). "If You do it not, take notice of war from Allah and his Apostle, but You turn back, You shall have your capital sum: Deal not unjustly, and You shall not be dealt with unjustly". (al-Baqarah, 279) At the time of the revelation of the above Ayahs, the prevalent form of Riba was Riba al-Nasia. Therefore the companions of the Holy Prophet (Peace be upon him) understood the meaning of these Ayahs in terms of Riba al-Nasia. Thus Riba al-Nasia was categorically regarded impermissible in matters of Qarz/loan. RIBA AL-FADL Riba al-Fadl occurs in commodity exchange contracts where a contract provides payment for any extra quantity of the commodity. For instance, 1 kg of wheat is exchanged for more than 1kg wheat, regardless of quality consideration. What matters is that for a given quantity, it must be exchanged for the same quantity. In this case, the Hadith of the Prophet (Peace be upon him) emphasises the point. "Sell gold for gold, silver for silver, dates for dates, wheat for wheat, salt for salt, and barley for barley, like for like and equal for equal so he who made an addition or who accepted an addition, committed the sin of taking interest. But sell gold for silver as you like but hand to hand and sell barley for dates as you like but hand to hand." Though the above Hadith mentions the incidence of Riba in only six things, the Fuqaha have extended the application of this Hadith to all commodity transactions characterized by the same underlying reason. Whenever the same commodity is exchanged for a higher quantity of the same commodity, the Riba al-Fadl will be incurred. In the light of the above explanation, it is clear that the word, 'interest' as commonly understood in context of banking/financial pertains to Riba al-Nasia. Therefore, any extra payment specified in Qarz relating to contract over and above the principal amount, falls under the definition of Riba al-Nasia, irrespective of the rate/amount of the extra payment. Hence, both simple and compound interests are prohibited as being Riba al-Nasia. Some people, perhaps have misunderstood the meaning of the following verse: "O you who believe, devour not usury doubled and multiplied but fear Allah that You may (really) prosper". (3:130) And have tried to argue the admissibility of the simple interest. This is a totally wrong derivation. The fact that the Holy Qur'an wants to root out interest-ridden mentality transpires in the verse (2:279). Ibn-e-Jareer has reported the interpretation of Hazrat Qatada in his book "… that the Holy Qur'an permits the lender to receive the principal amount only and does not allow any addition (however small it may be)". How important is it to avoid riba? The Prophet said in the Farewell Pilgrimage, ``Every riba of Jahiliyyah is abolished under these feet of mine, and the first riba abolish is that of `Abbas.’’ It was around this time that Allah revealed the verse, (translated) ``This day have I perfected for you your religion, completed My favor upon you and chosen Islam for you as your religion.’’[al-Ma’idah] The religion was completed, and all the regulations (including riba) had been legislated by that time. But, this was not the last revelation. A few days after that, approximately nine days before the Prophet left this world, some further verses were sent down. ``O you who believe! Fear Allah, and GIVE UP WHATEVER REMAINS OF RIBA, IF INDEED YOU ARE BELIEVERS. {my emphasis} And, if you do not do [so], then receive news of a war from Allah and His Messenger. [On the Day of Judgment, the consumer of riba will be given weapons and asked to prepare for war with Allah, and whoever has Allah as an adversary shall surely be overcome.] But, if you repent, then for you is your principal; do not wrong [by taking interest], and you will not be wronged [bydeprivation of the principal]. And, if [the debtor] is of straitened circumstances, then [give him] reprieve until ease. And, it would be better for you that you [remit the debt as] charity, if only you knew. And, fear a day in which you will be returned to Allah. Then, every soul shall be paid for what it has earned, and they will not be wronged.’’ [Qur’an, 2:278-281] (my emphasis.) This is something for us to ponder over. The last revelation of the Qur’an - at almost the last possible time for revelation- is on riba. This must be to reiterate its severity, and to issue a dire warning to us against it. Not even the dhimmis (non-Muslim citizens) are allowed to deal in riba in the Islamic State. The Prophet wrote to the Christians of Najran,’ The person amongst you who deals in interest is not under our protection.’ [Kanz al-`Ummal] Punishment for riba Permissibility of taking or giving interest by Muslim in non-Muslim countries The taking of interest by a Muslim in non-Muslim countries is not permissible just as indulging in alcoholic drinks is not permissible either. Being a Muslim in a non-Muslim country makes no difference to the duties a person has to fulfil as a Muslim. The correct position is that dealing in interest is not permissible in a Muslim country nor a non-Muslim country. Some jurists are of the view that interest-bearing loans can be given to a non-Muslim. The majority of jurists, however, have not endorsed this view. The correct view, therefore, is that charging interest is not permitted in any case, no matter whether the debtor is a Muslim or a non-Muslim. If a person somehow ends up having some income from ijterest, a fact which is not uncommon in non-Muslim countries, can this interest be given away to the poor, orphans or a widows? Ideally, a person should avoid receiving interest at all, however, should the person have somehow received it, then he can give it to anyone who is entitled under Zakat. As for opening a savings account in a non-Muslim country with the intention to distribute its interest among the poor is never recommended or approved. It is always advised to the Muslims to keep their money in a non interest-bearing current account. However, if somebody has opened a savings account, either due to his ignorance of Shari'ah injunctions or because of his negligence, then it is only in that instance, that he can give the interest as zakat. This does not mean however, that he can deliberately open an interest bearing account for the disbursement of its interest to the poor. In fact, opening an interest bearing account amounts to entering into a transaction of interest which in itself is a clear sin. Those who have already committed this act are advised to atone for it by giving the interest money to the poor. It is not advisable however for one to commit a sin in order to atone for it by helping the poor. Taking a bribe, for example, is sin. If a person has earned some amount through bribes and he is unable to return it back to the original owners, he is advised to give that amount to the poor in order to atone for his sin to the best possible extent. But one cannot be advised to accept bribe with the intent of giving the money to the needy. The same principle is fully applicable to interest transactions as well. Permissibility for a person gaining some interest-based profit in a non-Islamic country to pay taxes out of this amount for his income in that country The second conference on the Islamic banking held at Kuwait on 6-8 Jamadi Al Akhirah 1403 A.H., (21-23 March 1983) offered the following advice: The conference advises the rich Muslim to direct their wealth, first to the Islamic banks, Islamic organizations, and the Islamic companies within the Arab and Muslim countries, and then in foreign countries. Until the time this is achieved, the interest they gain is an evil gain and they should collect it and expend it on the general welfare of the Muslims. To continue to deposit it in the banks and institutions functioning on the principle of interest, while they can avoid it if they wish, is an unlawful act. In the light of this principle any taxes due on this evil gain may be paid out of it, but it is not permissible to pay taxes due on any other activity out of it. Is it permissible under Shari'ah to use credit cards? Normal credit cards (like American Express etc.) do not charge any interest for the initial period, which extends in some cases to three or four months. It is only in case of default after the prescribed period that they charge a penal interest. Therefore, their basic transaction per se does not have an element of interest. The penal-interest is an additional condition imposed but which does not render the whole transaction invalid. If a Muslim subscribes to such credit cards with a clear intention that he will always pay the bills promptly and he has good reasons to believe that he will never default in payment, and thus will never have to pay interest, it is only then that it is permissible for him to use such cards. Repenting from riba It should be quite clear by now that the interest obtained nowadays from banks and the like is Haram without any doubt. If you have been guilty of consuming riba, then you should repent to Allah sincerely. You should feel regret over your sin, cease it immediately, and resolve never to return to it again. The interest, which you have from the past, must be disposed of. You cannot keep it, for it is Haram money. You may not destroy it, because the Messenger of Allah (may Allah bless him and grant him peace) forbade the destruction of money [Muwatta’]. Nor should you give it back to the bank, for that would only strengthen it and further the institution of riba. Hence, you should give it away for general projects of good, but with the intention of getting rid of Haram money, not with the intention of charity Jazak Allah Khair Your Sister Asifa |
| NS |
| 06/22/02 at 00:28:02 |
| Asim |
Madinat al-Muslimeen Islamic Message Board |