In Islamic terminology, the word “riba” (interest) refers to a conditional increase or profit on a loan. It also involves one party receiving an excess from the other in the exchange of a measured or weighed item. The other party receives less. This increase or excess is free from consideration and is conditional in the contract. This practice is strictly forbidden in Islam due to its moral and economic implications.
Definition of Riba: In Sharia terminology, riba is defined as follows: “Taking a conditional increase or profit on a loan. Receiving an excess from one of the two parties in the exchange of a measured or weighed item. This excess is free from consideration and is conditional in the contract.”
For example, lending someone a hundred rupees could involve certain conditions. One such condition might be that more than a hundred, say two hundred rupees, must be given in return. Another condition could be taking further advantage of the loan.
Quranic Prohibition of Interest
Interest is absolutely forbidden in Islam because it leads to economic exploitation, gluttony, greed, selfishness, cruelty, and other moral vices. It also causes economic and financial disasters. The Holy Quran prohibits interest in multiple verses.
“O you who have believed, do not consume interest (i.e., do not take interest in multiple installments), and fear Allah, that you may be successful.” (Surah Al-Imran, verse 130, translation: Bayan-ul-Quran)
The Holy Quran not only declares interest absolutely forbidden. It also states that it is a war against Allah and His Messenger. Various warnings are mentioned to emphasize the prohibition of interest.
“And those who consume usury will not stand up (from their graves on the Day of Resurrection) except as one whom Satan has made to be intoxicated, lying down (i.e., stunned and intoxicated). This is because they said, ‘Sale is like usury,’ while Allah has permitted sale and forbidden usury. But whoever receives a reminder from his Lord and desists will keep whatever was taken before. His affair will be with Allah. But whoever returns, these will enter Hell, to abide therein forever.” (Surah Al-Baqarah, verse 275, translation: Bayan-ul-Quran)
The Economic and Moral Implications of Interest
Although interest apparently increases wealth, in reality, it causes loss of wealth, misfortune, and sudden disasters. The Holy Quran states:
“Allah destroys interest and increases charity, and Allah does not like the disbeliever (or) the doer of sin.” (Surah Al-Baqarah, verse 276, translation: Bayan-ul-Quran)
It is because of these internal harms and various economic disasters that Allah Almighty has commanded us to avoid interest:
“O you who believe, fear Allah and give up what remains of interest, if you are believers.” (Surah Al-Baqarah, verse 278, translation: Bayan-ul-Quran)
Those who persist in usury despite the prohibition face severe warnings. Allah declares usury as a declaration of war against Him and His Messenger:
“Then if you do not (act), then hear the proclamation of war from Allah and His Messenger (i.e., there will be jihad against you). And if you repent, you will have your original wealth, and you will not be able to wrong anyone, nor will anyone be able to wrong you.” (Surah Al-Baqarah, verse 279, translation: Bayan-ul-Quran)
Hadith on the Prohibition of Interest
The Prophet Muhammad (peace and blessings of Allah be upon him) described usury as a destructive practice in various Hadiths.
Destructive Practice
“Hazrat Abu Hurairah (RA) narrated from the Prophet (PBUH) that he (PBUH) said: Stay away from seven destructive things. The people asked: O Messenger of Allah, what are they? He said: Associating partners with Allah, practicing magic, killing a soul which Allah has forbidden except for a reason, consuming interest, consuming the property of an orphan, fleeing from Jihad (i.e. running away), and accusing chaste, forgetful, believing women of adultery.” (Sahih Al-Bukhari, Book of Wills, Chapter on the saying of Allah Almighty that those who eat the wealth of orphans, Hadith No. 2766, Vol. 2, p. 242, Al-Muktab Al-Islami)
Destruction of Towns
“It was narrated from Abdullah bin Mas’ud (may Allah be pleased with him) that the Messenger of Allah (peace and blessings of Allah be upon him) said: When adultery and usury become widespread in a town, Allah Almighty permits the destruction of its people.” (Kitab al-Kaba’ir by al-Dhahabi, al-Kaba’ir, 2nd Tenth, p. 69, Dar al-Kutub al-Ilmiyah)
Spreading Madness
“He (PBUH) said: ‘In a nation where interest is widespread, madness is widespread.'” (Kitab al-Kaba’ir by al-Dhahabi, al-Kaba’ir, 2nd Tenth, p. 70, Dar al-Kutub al-Ilmiyah)
Severe Punishment
“Hazrat Abu Hurairah (may Allah be pleased with him) said: The Messenger of Allah (peace and blessings of Allah be upon him) said: The night I was taken on a journey (in the Miraj), I passed by a group whose bellies were like loins, and many snakes were visible from outside their bellies. I said: Gabriel! Who are these people? They said: Usury eaters.” (Sunan Ibn Majah, Kitab al-Tijjah, Chapter on the Intensification of Usury, Hadith No. 2273, Vol. 2, p. 763, Id. Darahya al-Kutub al-Arabiya)
Worse than Adultery with One’s Mother
“It was narrated from Abu Hurairah (may Allah be pleased with him) that the Messenger of Allah (peace and blessings of Allah be upon him) said: There are seventy sins in usury, the least of which is like a man committing adultery with his mother.” (Sunan Ibn Majah, Kitab al-Tijjah, Chapter on the Intensification of Usury, Hadith No. 2274, Vol. 2, p. 763, Id. Darahya al-Kutub al-Arabiya)
Curse on Those Involved in Usury
“It was narrated from Abdullah bin Mas’ud (may Allah be pleased with him) that the Messenger of Allah (peace and blessings of Allah be upon him) cursed the one who consumes interest, the one who gives it, the one who witnesses it and the one who writes it down.” (Sunan Ibn Majah, Kitab al-Tijjah, Chapter on the Intensification of Usury, Hadith No. 2277, Vol. 2, p. 764, Id. Darahya al-Kutub al-Arabiya)
Prevalence of Interest in Modern Times
It should be noted that various forms of interest financing are prevalent in society today under different names. A person who is not familiar with the Shariah rulings falls prey to them to some extent or another. The Hadith states:
“It was narrated from Abu Hurairah (may Allah be pleased with him) that the Messenger of Allah (peace and blessings of Allah be upon him) said: A time will come upon the people when there will be no one who has not consumed interest, and even those who do not consume interest will be affected by it.” (Sunan Ibn Majah, Kitab al-Tijjah, Chapter on the Intensification of Usury, Hadith No. 2278, Vol. 2, p. 764, Id. Darahya al-Kutub al-Arabiya)
Conclusion
Interest is a highly reprehensible practice that is absolutely forbidden in Islam. Due to its moral and economic harms, Allah has commanded us to avoid it. He has issued severe warnings for those who engage in it. Muslims are urged to avoid interest. They should adhere to the commands of Allah. This will achieve success in this world and the Hereafter.
Source of this informtion: Jamia Uloom Islamia Allama Muhammad Yousuf Banuri Town
May Allah protect us from the evils of interest and guide us on the path of righteousness.