Riba in Islam

Riba[1] is considered amongst Seven Heinous Sins (Al-Saba al-Mubiqat - السَبعَ الموبِقاتِ), namely[2],

* i) Shirk,
* ii) Magic,
* iii) Suicide,
* iv) consuming Riba,
* v) unlawfully taking orphan’s money,
* vi) fleeing from battlefield and
* vii) accusing chaste believing women.

Allah swt states in Quran:

يَا أَيُّهَا الَّذِينَ آمَنُواْ لاَ تَأْكُلُواْ الرِّبَا أَضْعَافًا مُّضَاعَفَةً وَاتَّقُواْ اللّهَ لَعَلَّكُمْ تُفْلِحُونَ



3:130 O you who have believed, do not consume usury, doubled and multiplied, but fear Allah that you may be successful.

وَأَحَلَّ اللّهُ الْبَيْعَ وَحَرَّمَ الرِّبَا

2:175 Allah has permitted trade and has forbidden interest

The Prophet Mohammad, may Allah’s mercy and peace be upon` him, said in his farewell sermon: “God has forbidden you to take Riba, therefore all riba obligation shall henceforth be waived. Your capital, however, is yours to keep. You will neither inflict nor suffer inequity. God has judged that there shall be no riba and that all the riba due to `Abbas ibn `Abd al Muttalib shall henceforth be waived.”[3]

Quran explicitly prohibits Riba, and since Quran is an undisputed source of guidance, all Muslims unanimously agrees on prohibition of Riba. There is no difference of opinion among any school of thought on prohibition of Riba in Islamic Shariah.

Example of Various Types of Riba
EXAMPLE OF RIBA

Allah swt mentions that the person who deals with Riba (ربا) will stand (on judgment day) as one who is being beaten by Satan into insanity[4]. Here Allah swt made it clear that “trade” and “riba” are not same, and that He forbade “riba” and allowed “trade”[5]. He further stated that whoever accepts guidance of Allah must immediately stop dealing in Riba, and those who return to Riba after Allah’s guidance has reached are dwellers of fire, because Allah swt destroys “Riba” and He swt reward those who gives Charity.

Prophet Mohammad (pbuh) cursed the one who deals with Riba. From Jabir (ra): The Prophet (pbuh) cursed the receiver and the payer of riba, the one who records it and the two witnesses to the transaction and said: "They are all alike [in guilt]." [Sahih al-Muslim, Sahih Al-Bukhari, Tirmidhi, Ibn Majah, Bahiqi and Musnad Ahmad]



Islamic Shariah considers Riba as tool of oppression and a mean to unjustly take others money[6] by exploiting their needs and circumstances. Hence it forbid Riba base system altogether and it promotes Charity as an alternative. Therefore,, Prophet Mohammad (pbuh) said: “God has judged that there shall be no riba” [Last Sermon].



Islamic Shariah also consider Riba as a medium for hoarding money by elite and powerful, and it warns against those who accumulate wealth with this unjust way. Alternatively, Islam on one hand distributes wealth by implementation of Charity, Zakat and Laws of Inheritance, and on other hand, vigorously encourages spending of money to help the needy.

The crimes of dealing in Riba are so serious that Allah swt has declared war against those who deal in Riba[7]. The Prophet (pbuh) has cursed anyone who deals with Riba, the one who takes it, one who pays it and one who records it, they are all “equal”[8].

Muslims around the world traditionally avoid eating pork and alcohol, whereas, Riba is considered much worse than that. The Prophet (pbuh) declared consumption of Riba worse than adultery: worse than “to a man committing adultery with his own mother”[9].

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FOOTNOTE REFERENCES

[1] For the purpose of this document we will use the word “Riba”, which is a Quranic term. One of its applications is “interest” or “usury” on loaned money. Quranic term in not limited to money, it includes all those loan transactions where debtor returns in excess or above the original loan, be it money, gold, silver, eatable or any other item or goods; anything in excess to original is considered “Riba” if items exchanged are of same kind (e.g gold for gold). See Definition.

[2] Al-Saba al-Mubiqat (السَبعَ الموبِقاتِ): Narrated Abu Huraira: The Prophet said, "Avoid the seven great destructive sins." The people enquire, "O Allah's Apostle! What are they? "He said, "To join others in worship along with Allah, to practice sorcery, to kill the life which Allah has forbidden except for a just cause, (according to Islamic law), to eat up Riba (usury), to eat up an orphan's wealth, to give back to the enemy and fleeing from the battlefield at the time of fighting, and to accuse, chaste women, who never even think of anything touching chastity and are good believers. [Sahih al-Bukhari, Sahih al-Muslim]
أخرج البخاري ومسلم وأبو داود والنسائي عن أبي هريرة رضي الله عنه أن رسول الله صلى الله عليه وسلم قال { اجتنبوا السبع الموبقات , قيل يا رسول الله وما هن ؟ قال الشرك بالله , والسحر , وقتل النفس التي حرم الله إلا بالحق , وأكل مال اليتيم , وأكل الربا , والتولي يوم الزحف , وقذف المحصنات الغافلات المؤمنات }

[3] Last Sermon of Holy Prophet Mohammad (pbuh) given on 10 Dul-hajj 10 hijra, mentioned in all book of Hadith. Sahih Bukhari mentions parts of it. Musnad Imam Ahmed recorded the longest and complete speech.
أَلَا إِنَّ كُلَّ رِبًا كَانَ فِي الْجَاهِلِيَّةِ، مَوْضُوعٌ عَنْكُمْ كُلُّهُ، لَكُمْ رُؤُوسُ أَمْوَالِكُم لَا تَظْلِمُونَ وَلَاتُظْلَمُونَ، وَأَوَّلُ رِبًا مَوْضُوعٍ، رِبَا الْعَبَّاسِ بْنِ عَبْدِالْمُطَّلِبِ مَوْضُوعٌ كُلُّه

[4] Quran 2:275.[al-Baqarah]. See Verse in “Nus from Quran.
[5] Quran 2:275 [al-Baqarah]. See Verse in “Nus from Quran.
[6] Quran 4:161 [an-Nisa]. See Verse in “Nus from Quran.
[7] Quran 2:278 [al-baqarah]. Verse is mentioned later in the document.
[8] Recorded in Sahih al-Muslim. See Nus later.
[9] Recorded in Sunan Ibn Majah. See Nus later.