Chapter IV

Riba in the Qur`an: A Closer Examination of Relevant Issues

[This chapter may be omitted by readers who do not want to go into minute details.]

In the last Chapter we examined the Qur`anic verses about riba in some detail and showed that they understand riba in its pre-Islamic sense of interest charged when loan could not be paid on due date. In that examination we took certain positions on some relevant issues without providing detailed support for our positions. These issues are:

a) Is charging interest essentially different from increasing price for deferring payment?

b) Is all interest zulm? If not, then is all interest still prohibited?

c) Are the ahadith prohibiting or cursing the paying of riba authentic?

d) Does 30:39 refer to riba as a type of interest or to a gift, as some commentators have suggested from very early times?

e) What are the backgrounds and the chronological order of the revelation of the verses about riba?

In the previous chapter we assumed answers to these questions with brief comments. In the present chapter we discuss them in detail.

(A)

Essential Similarity of Charging Interest and Increasing Price for Deferring Payment

Consider the following example, mentioned earlier in the Introduction:

A person A wants to buy some machinery costing $50,000 for his company but wants to pay after one year. Another person B orders the machinery and upon delivery immediately sells to A for $55,100 to be paid in one year. In his mind B charged $100 for his service and 5000 for deferring the payment for one year. This arrangement is perfectly halal, according to a vast majority of fuqaha of all backgrounds. Called murabahah, it is one of the ways “Islamic banks” finance businesses and individuals. But is it necessary that the machinery be delivered to B and he should take possession of it? According to Usmani the answer to this question is in the affirmative. He says that for murabahah to be permissible the following conditions are “necessary”:

a) This type of transaction [murabahah] may be undertaken only where the client of a bank wants to purchase a commodity. This type of transaction cannot be effected in cases where the client wants to get funds for some purpose other than purchasing a commodity, like overhead expenses, payment of salaries, settlement of bills or other liabilities.

b) To make it a valid transaction it is necessary that the commodity is really purchased by the bank and it comes into the ownership and possession (physical or constructive) of the bank so that it may assume the risk of the commodity so far as it remains under its ownership and possession.

c) After acquiring the ownership and possession of the commodity it should be sold to the customer through a valid sale.

But these conditions imposed by Usmani have no basis in the Qur`an. Some ahadith may be used to derive conditions like b) and c) above. But a look at these ahadith shows that:

i) They very consistently talk about foodstuff. In a narration, Ibn ‘Abbas extends the principle to other products:

Ibn ‘Abbas reported God’s Messenger as saying: He who buys foodstuff should not sell it until he has taken possession of it. Ibn ‘Abbas said: I regard everything like foodstuff (as far as the applicability of this principle is concerned). (Muslim 10/3642)

But in the words of the Holy Prophet himself only foodstuff is mentioned and even the view attributed to Ibn ‘Abbas is not found in many of the narrations from him. Imam Malik, among others, did not extend the rule to other items.

ii) Many narrations use the word istawfiya. This word, which can mean “to receive in full” but also “to complete, finalize”, does not necessitate physical possession. It implies only that the sale has been finalized and the product has legally become the property of the buyer. This is supported by the fact that some narrations have both istawfiya and qabida. This latter word properly means taking physical possession and seems to have been added as an interpretation and in some narrations replaces istawfiya.

iii) Taking physical possession is understood in some narrations as taking the product to one’s place and in other narrations as simply shifting from the spot where they were bought to some other place. One reasonable explanation of this variation is that the idea of physical possession was not present in the original hadith and was introduced later in different ways.

iv) Some narrations suggest that prohibition of reselling before taking possession applied when the foodstuff is bought jizafan, that is, without measuring or weighing it. Some narrations prohibit reselling foodstuff before it is “weighed”.

In view of the above facts it is not surprising that the fuqaha are not agreed on the interpretation of these ahadith. Commenting on them Imam Nawawi says

:

. فِي هَذِهِ الْأَحَادِيث النَّهْي عَنْ بَيْع الْمَبِيع حَتَّى يَقْبِضهُ الْبَائِع , وَاخْتَلَفَ الْعُلَمَاء فِي ذَلِكَ ,

فَقَالَ الشَّافِعِيّ : لَا يَصِحّ بَيْع الْمَبِيع قَبْل قَبْضه سَوَاء كَانَ طَعَامًا أَوْ عَقَارًا أَوْ مَنْقُولًا أَوْ نَقْدًا أَوْ غَيْره . وَقَالَ عُثْمَان الْبَتِّيّ : يَجُوز فِي كُلّ مَبِيع . وَقَالَ أَبُو حَنِيفَة : لَا يَجُوز فِي كُلّ شَيْء إِلَّا الْعَقَار . وَقَالَ مَالِك : لَا يَجُوز فِي الطَّعَام وَيَجُوز فِيمَا سِوَاهُ , وَوَافَقَهُ كَثِيرُونَ . وَقَالَ آخَرُونَ : لَا يَجُوز فِي الْمَكِيل وَالْمَوْزُون وَيَجُوز فِيمَا سِوَاهُمَا

In this there is prohibition of the sale of a product before the buyer takes possession of it. But scholars have differed about it. Shafi‘i said that the sale of a product is not correct regardless of whether it is foodstuff or immovable (landed) property or portable and whether it is cash or otherwise. And ‘Uthman bin al-Batti said: it is permissible for all products. And Abu Hanifah said: it is not permissible except for immovable property. And Malik said: it is permissible except in case of foodstuff and many others agree with him. Others said: it is not permissible for things that are measured or weighed but is permissible in case of other things. (5/432-3)[1].

Thus fuqaha are far from unanimous on the condition that one needs to take possession of a product before it is resold. Some fuqaha require such possession for all products, others for only some of the products and still others do not require it at all for any product. Indeed, some ‘ulama would even allow the sale of a sakk or “cheque”. Thus a little after the above comment Nawawi continues:

الصِّكَاكَ جَمْع صَكّ وَهُوَ الْوَرَقَة الْمَكْتُوبَة بِدَيْنٍ وَيُجْمَع أَيْضًا عَلَى صُكُوك , وَالْمُرَاد هُنَا الْوَرَقَة الَّتِي تَخْرُج مِنْ وَلِيّ الْأَمْر بِالرِّزْقِ لِمُسْتَحِقِّهِ بِأَنْ يَكْتُب فِيهَا لِلْإِنْسَانِ كَذَا وَكَذَا مِنْ طَعَام أَوْ غَيْره فَيَبِيع صَاحِبهَا ذَلِكَ لِإِنْسَانٍ قَبْل أَنْ يَقْبِضهُ . وَقَدْ اِخْتَلَفَ الْعُلَمَاء فِي ذَلِكَ ; وَالْأَصَحّ عِنْد أَصْحَابنَا وَغَيْرهمْ جَوَاز بَيْعهَا ; وَالثَّانِي مَنْعهَا

Sakk (pl. sukuk or sikak) is a paper with a payable amount written on it. What is meant here is the paper issued from a governor with provisions for the deserving in that he writes in it for a person such and such of the foodstuff or something else. Its owner sells that (what is mentioned on the paper) before taking possession of it. ‘Ulama have differed about this. The sounder view among our companions and others is the permissibility of its sale. The second view prohibits it.”

The sources of Islam, therefore, do not provide any compelling reason to insist that in our example B must take possession of the machinery before he resells it to A. B can go to the store with A, buy the machinery and there and then sell it on credit for $55,100. But why does B have to go to the store? He can, especially if he is a banker, transfer the money to the store from his office and instruct them to deliver the machinery to A, taking a receipt from him. And why not give $50,000 to A in bank draft with the condition that the money is to be used for buying the machinery and then a year later B is to be given the amount of $55,100? Recall Nawawi’s comment in which he mentions the view of some scholars who allow the sale of a sakk (or cheque), a view that Nawawi himself considers sounder than its opposite.

In our example, the final step would be to altogether remove the machinery from the picture: B gives $50,000 to A and receives from him $55,000 a year later (no money is charged for services in this case). It is clear that this step will increase flexibility for the borrower and convenience for the lender. The borrower can use the money for any number of expenses for his business instead of being bound to use it in the purchase of the machinery while the lender does not have to go through the motions of buying and selling each time he advances a loan to business people. This flexibility and convenience will enhance economic activity and hence prosperity in the society, provided there are no other bad economic policies that offset the advantages of an interest-based investment. It should be noted that the utility of money is precisely to facilitate and enhance economic activity. In on-the-spot transactions money, as the medium of exchange, provides greater flexibility and convenience, which in turn enhances trade. Without money people would have to barter things that they need but do not have for things that they have but do not need. Thus if a person needs meat he would have to have something that he does not need such as cloth and find someone who has some meat to spare while at the same time needs some cloth. This may often be inconvenient. Money makes the exchanges much easier. It would allow the first person to buy meat from the second even if the latter does not need cloth[2]. This type of utility of money for on-the-spot transactions is extended to credit transactions by interest-based lending.

But, of course, most Muslims would consider the above-mentioned final step to be one of the worst sins in Islam. Let us hear this from Usmani:

… when money is exchanged for money, no excess is allowed, neither in cash transaction, nor in credit, but where a commodity is sold for money, the price agreed upon by the parties may be higher than the market price, both in cash and credit transactions. Time of payment may act as an ancillary factor to determine the price of a commodity, but it cannot act as an exclusive basis for and the whole consideration of an excess claimed in exchange of money for money.

This position is accepted unanimously by all the four schools of Islamic law and the majority of the Muslim jurists. (226-227)

But is this view based on the Qur`an, the Hadith and reason? We must not be overly daunted by the statement here that all the four schools of Islamic law and the majority of the Muslim jurists agree on the view. There are too many indications that in some matters the four schools of Islamic law and the majority of fuqaha have agreed on errors[3] for us to abandon fresh reflection on the Qur`an and the Hadith and use of our reason.

One could refer to Qur`an 2:275 and argue as follows to permit increase in price for deferment and prohibit interest on a loan of money: The riba eaters say that sale is like riba, but rejecting their statement the Qur`an says that God has permitted sale and prohibited riba. Hence sale of an item with price increased for deferment is allowed but lending money on interest is prohibited. But, as shown in Chapter III, the riba eaters did not say that sale is like riba to state an economic fact but did so to use that fact to morally justify their practice of riba; also, the Qur`an is not rejecting their statement from an economic point of view but the moral justification for riba that they derive from it. Moreover, the Qur`anic statement that “God has permitted sale” does not mean that every sale is permitted – clearly sale of harmful addictive drugs is not permitted. Similarly, the statement that “God has prohibited riba” does not mean every excess over the capital is prohibited.

The view that increase in price of an item is permitted but interest on money is not permitted naturally suggests that the reason for this difference must be some difference between commodity and money. Hence an important part of the scholars’ discussions on riba is the distinction between commodity and money and an explanation of why increase in price is permissible and interest is not. Thus Usmani says:

Islam has treated money and commodity differently. Having different characteristics both are subject to different rules and principles. Since money has no intrinsic utility, but is only a medium of exchange which has no different qualities, the exchange of a unit of money for another unit of the same denomination cannot be effected except at par value. If a currency note of Rs.1000/= is exchanged for another note of Pakistani rupees, it must be of the value of Rs.1000/=. The price of the former note can neither be increased nor decreased from Rs.1000/= even in a spot transaction, because the currency note has no intrinsic utility nor a different quality (recognized legally), therefore, any excess on either side is without consideration, hence, not allowed in Shar'iah. As this is true in a spot exchange transaction, it is also true in a credit transaction where there is money on both sides, because if some excess is claimed in a credit transaction (where money is exchanged for money) it will be against nothing but time. (Para 221)

But money obviously has some utility, for otherwise why should it be wrong to exchange Rs 1,000 with Rs1,100? The very objection to this exchange is a recognition that Rs 1,100 has more of something than Rs 1,000, which means that money has some value. Usmani says that the utility of money is not “intrinsic”. Since intrinsic means “belonging to the real nature of a thing”, this implies that money in its real nature has no utility. But what is the real nature of money? Writers who use the differences between commodities and money to justify increasing the price of an item for deferring payment but prohibit all interest seem to think of real nature of a thing in terms of the physical matter of which the thing is made. Thus the real nature of foodstuff is the physical matter of which it is made and it has “intrinsic utility” because this physical matter has utility as food. But is this a correct way of thinking of the real nature of all things? Take, for example, a book. The physical part of the book consists of the paper on which it is printed or written. But does that define the real nature of a book? Clearly not! It is rather the information and ideas contained in the book that defines its real nature. This implies that a book has intrinsic utility to the extent the information and ideas contained in it have value. The case of money is similar. Money is like a document. Its real nature is not the paper or metal from which it is made but the agreement in the society that makes it a medium of exchange. Money has utility because by facilitating exchange it develops economy and contributes to the better fulfillment of the needs of the people, including physical needs. This utility is intrinsic because it proceeds from the real nature of money. Thus unless we think of utility in a very narrow sense and connect it with physical matter, it is not true to say that money has no intrinsic utility.

We may also note that if money has no intrinsic value or utility of its own, then why should there be zakah on money like there is zakah on commodities?

But even if we grant that there is a fundamental difference in the utility of commodities and money, it is not clear how this difference translates into the permissibility of increasing the price of a commodity for deferment of the payment and impermissibility of all interest.

It is perfectly understandable that no one should or would exchange, on the spot, Rs 1,000 for Rs 1,100. But if the lawful owner of Rs. 1000 is deprived of its use for a period of time, then it makes perfect sense that he should be compensated for this, unless it turns out that compensating him will cause undue hardship to the borrower. Hence, in the absence of the special consideration just mentioned, it is completely justified to give Rs 1000 at one point in time and then receive Rs. 1100 at another point in time in the future.

Finally, Usmani’s analysis does not consistently maintain the distinction between money and commodity. Rs 1,000 cannot be exchanged for $1100 after one year because money, so it is said, has no intrinsic utility. But what about 1,000 kgs of wheat being exchanged for 1,100 kgs of wheat of the same quality after one year? The traditional answer accepted by Usmani is: No, we cannot do that without sinning. But then what happened to the argument that money and commodity are different because money has no intrinsic value while a commodity like wheat has?

Another concern raised by Usmani is that if money is exchanged for money on a deferred basis, there would be a disconnect between money and actual goods and services:

Since interest-bearing loans have no specific relation with actual production, and the financier, after securing a strong collateral, normally has no concern how the funds are used by the borrower, the money supply effected through banks and financial institutions has no nexus with the goods and services actually produced on the ground. It creates a serious mismatch between the supply of money and the production of goods and services. This is obviously one of the basic factors that create or fuel inflation. (170)

It is impossible for money supply to have “no nexus with the goods and services”, for otherwise money would cease to be useful as a medium of exchange for goods and services and it would go out of use. We can talk only about the connection of money and goods/services getting loose. But even that is not a necessary consequence of interest-based lending. For, when a businessman borrows $50,000 for one year at a certain interest, he as a rule uses the money to add value to available resources and creates additional goods and services whose expected value would generally be not less than the total interest paid, since otherwise the businessman would expect to incur a loss and therefore would not borrow the money. Consequently, the connection between money and goods/services will remain intact. This would be particularly the case, if the economy is relatively “free” and interest rate is determined by competition. Moreover, it is not clear why giving $50,000 on interest would loosen the connection between money and goods/services but selling a machinery for $55,000 immediately after buying it for 50,000 would not. In particular, it is not clear why interest-bearing lending would contribute to inflation while increasing prices of products for deferment would not.

Influence of Greek philosophers

The ideas about money that Usmani is expressing in the above quotations are not derivable from the teachings of God and his Messenger. Their probable source is Greek philosophy that Muslims early started to study and that also influenced Judeo-Christian thought in the Middle Ages. Let us briefly review the views of Greek philosophers about money and interest as they are described in Gelpi 7-8:

In his Utopia, Plato banned gold and silver and all lending, including, of course, interest-based lending. Aristotle also condemned interest. He explained this by recourse to the concept of “natural law” that Plato was instrumental in making creditable. “The natural law was common to all, based on universal reason which all men share. .. Side by side with the natural law which, because of its universal nature was too general, positive human laws regulate social organization.” He condemns interest because he considers that it is incompatible with the very nature of money. Money is only a convention, the principal purpose of which is to facilitate exchange and which, he admits, may also be used as a store of value. This reasoning leads him to make a distinction between natural things and conventional things. Only the former can reproduce. The latter have no real existence, other than that accorded to them by men.” Interest-based lending is wrong because through it, “money itself becomes productive, and is diverted from its principal function which is that of facilitating exchange. … Just as children are of a nature identical to their parents, so interest, being of a similar nature to money, is the offspring of money, an idea which is completely against nature, therefore to be resisted at all costs. Of all means of acquiring wealth, it is the one most in contradiction to nature.” On the basis of this analysis, interest received the term “offspring” in Greek and “we find the famous formula of the Middle Ages: money does not beget money.”

The fact that this type of explanation of why interest is inherently bad has the authority of Plato and Aristotle does not make it credible, since in the field of economics both Plato and Aristotle had ideas whose wisdom is highly questionable, at least beyond the time and place in which these two famous philosophers lived. Thus, according to Plato, “the rich could not be virtuous. Citizens were thus forbidden to work in ‘productive’ occupation, which he considered to be degrading. Instead, they should devote themselves entirely to the affairs of the city. In such a Republic, trade is of little importance and markets are rare.” Aristotle also “set little value to trade, holding paid labour to be degrading, and gave pride of place to agriculture. His economic doctrine is marked by a social prejudice in favor of the great lord, for whom the only honourable occupations are those of warrior and landowner. Other occupations, such as trade and industry, should be reserved for slaves and metics [i.e., resident-aliens].”

Because Islam clearly encourages trade and industry Muslims did not accept views of the Greek philosophers concerning them. But since Islam prohibits riba, they seem to have been willing to accept the philosophers’ view that all interest is inherently wrong. They also accepted the philosophers’ explanation of why this is so. Thus we find Imam al-Ghazali (d. 505) explaining prohibition of riba in terms similar to those used by Aristotle:

So, the one who is using money in a manner contrary to its basic purpose is, in fact, disregarding the blessings of Allah. Consequently, whoever hoards money is doing injustice to it and is defeating their actual purpose. He is like the one who detains a ruler in a prison…

And whoever effects the transactions of interest on money is, in fact, discarding the blessing of Allah and is committing injustice, because money is created for some other things, not for itself. So, the one who has started trading in money itself has made it an objective contrary to the original wisdom behind its creation, because it is injustice to use money for a purpose other than what it was created for…. If it is allowed for him to trade in money itself, money will become his ultimate goal and will remain detained with him like hoarded money. And imprisoning a ruler or restricting a postman from conveying messages is nothing but injustice."

"Riba (interest) is prohibited because it prevents people from undertaking real economic activities. This is because when a person having money is allowed to earn more money on the basis of interest, either in spot or in deferred transactions, it becomes easy for him to earn without bothering himself to take pains in real economic activities. This leads to hampering the real interests of the humanity, because the interests of the humanity cannot be safeguarded without real trade skills, industry and construction." (quoted from Usmani 140)

Thus it seems that the views of money and interest that Usmani and other Muslim writers express today were initiated about a thousand years before Islam by the Greek philosophers.

The Greek ideas also seemed to have earlier influenced Christian tradition. Thus Christians viewed all interest as unjustified:

“Based on a passage from the Book of Exodus, the 806 capitular proclaims that ‘a loan consists in giving something: the loan is fair when what is asked back is what was given, no more.’ According to the capitular, usury is ‘asking for more than one has given, for example, if you have given ten sous and you ask for more in return, or if you have given a hogshead of wheat and then you ask for two back.’” [4]

(B)

Riba and Zulm: A Response to Usmani’s Arguments

It is a clear implication of the relevant Qur`anic verses that taking riba is zulm on the borrower. On this basis it can be justifiably argued that if in a lending arrangement there is no zulm on the borrower, then it cannot be viewed as a riba arrangement. For example, if there is no zulm on A if B buys a machinery for A at a price of $50000 and then receives back $55100 from A one year later, then there is no zulm on A if B gives to A a sum of $50000 now and receives back $55000 after a year. Hence both arrangements are free of riba. Usmani has, however, countered this reasoning with several arguments. In what follows I discuss these arguments.

I) ‘ILLAH AND HIKMAH

Usmani’s first argument is based on a distinction between ‘illah and hikmah:

It is a well settled principle of Islamic jurisprudence that there is a big difference between the ‘illah and the hikmah of a particular law. The ‘illah is the basic feature of a transaction without which the relevant law cannot be applied to it, whereas the hikmah is the wisdom and the philosophy taken into account by the legislator while framing the law or the benefit intended to be drawn by its enforcement. The principle is that the application of a law depends on the ‘illah and not on the hikmah. In other words, if the ‘illah (the basic feature of the transaction) is present in a particular situation while the hikmah (the wisdom) is not visualized, the law will still be applicable.

To illustrate the distinction between ‘illah and hikmah, Usmani gives two examples:

“The law has made it compulsory for the vehicles running on the roads to stop when the red street light is on. The ‘illah of this law is the red light, while the hikmah is to avoid the chances of accidents. Now, the law will be applicable whenever the red light is on; its application will not depend on whether or not there is an apprehension of an accident. Therefore, if the red light is on, every vehicle must stop, even though the roads of both sides have no other traffic at all. In this particular case, the basic wisdom (hikmah) of the law is not discernable, because there is no apprehension of any accident in any way. Still the law will be applicable in its full force, because the red light which was the real ‘illah of the law is present.”

“To cite another example, the Holy Qur'an has prohibited liquor. The ‘illah of its prohibition is intoxication but the hikmah of this prohibition has been mentioned by the Holy Qur'an [in 5:91:] … liquor inculcates enmity and hatred between people and it prevents them from remembering Allah. Can one say that he has been using liquor for a long time but it never resulted in having enmity with anyone, and therefore, the basic ‘illah of the prohibition being not present, he should be allowed to use liquor? Or can one reasonably argue that drinking wine has never prevented him from offering prayers at their due times, and therefore, the basic cause of prohibition mentioned by the Holy Qur'an being absent, the drinking should be held as permissible. Obviously, no one can accept these arguments because the enmity and hatred referred to by the Holy Qur'an in the above verse is not intended to be the ‘illah of the prohibition. It simply spells out some bad results which the liquor and gambling often produce. They have been mentioned as a hikmah and the philosophy of the prohibition, but the prohibition itself does not depend on these results. It is in the same way that after prohibiting the transaction of riba, the Holy Qur'an has mentioned the Zulm as a Hikmah or a philosophy of the prohibition, but it does not mean that prohibition will not be applicable if the element of zulm appears to be missing in a particular case. The ‘illah (the basic feature) on which the prohibition is based is the excess claimed over and above the principal in a transaction of loan, and as soon as this ‘illah is present, the prohibition will follow regardless of whether the philosophy of the law is or is not visible in a particular transaction.” (Para 119-120)

Usmani makes here three main points:

a. We cannot base applications of a law on whether in particular cases and in particular judgments the law serves its purpose.

b. There is a distinction between ‘illah and hikmah and it is only ‘illah that determines whether a law is to be applied.

c. In case of the prohibition of riba, ‘illah is “the excess claimed over and above the principal in a transaction of loan”. Since this ‘illah is present in all transactions with interest, every type of interest is prohibited.

We agree with the first point with two important additional observations. First, the principle that application of a law should not depend on whether in particular cases and in particular judgment it serves its purpose is itself necessary to achieve the purpose of the law. For, it will defeat the very purpose of having a law if individuals are left free to judge when it is applicable. Second, we need to make a distinction between individual cases judged not to fulfill the purpose of a law by an individual and categories of cases in which the law is judged by people generally not to serve its purpose. Such cases must be taken into account in the formulation and/or application of the law.

If a driver arrives at the crossing and finds red light, then, as Usmani correctly notes, he must stop even if no vehicle is visible on the crossing road. This principle does not ignore the hikmah or purpose of the law but rather fulfills it. For, there is the possibility of some drivers making a mistake; for example, a driver looks in one direction and finds no car but when he looks in the other direction a car in the driveway of a house near the intersection suddenly rushes onto the road and then to the intersection. This means that the probability of accidents will increase if drivers used their own judgment as to whether it is safe to cross the light. Moreover, if we allow drivers to cross the light when they see no vehicle coming, then in case of an accident the driver who crossed the red light can argue that he did not see the car coming and therefore he is not at fault. This will greatly increase the number of times drivers cross the red light and hence the number of accidents. The purpose of the law prohibiting the crossing of red light is, therefore, best achieved by not allowing drivers to make individual judgments as to when it is safe to proceed through the red light, although even in this case exception needs to be made in some extreme cases such as when one of the passengers in the car is having a heart attack.

To illustrate our second observation, let us now suppose that only one of the roads at a crossing is open. The other one is blocked in such a way that no vehicle of any kind can possibly pass through it, not just according to the judgment of an individual driver but according to the judgment of every observer. Normally in such a case the city administration would change the traffic signals. But sometimes there is a lack of communication or neglect. In the formulation and/or application of traffic laws we must make allowance for such situations and it should be permissible for drivers to cautiously cross the red light.

In case of riba the situation is similar. The purpose of its prohibition is to minimize the chances of zulm in loan transactions. If in an individual loan transaction riba is judged not to cause any zulm in an individual judgment, then this does not mean that riba becomes lawful in that transaction. However, there are categories of transactions involving interest that almost all people including the borrowers will admit do not cause any zulm, e.g. sales of houses on mortgage. We need to treat such categories of interest differently: Since the Qur`an takes it for granted that riba inflicts zulm on the borrowers, we must exclude these categories of interest from our definition of riba. Later, we will elaborate this point in greater detail.

Turning to the second point (b), Usmani describes the principle that “the application of a law depends on the ‘illah and not on the hikmah” as a “well-settled principle of Islamic jurisprudence”. But this is not quite true, since fuqaha of Maliki and Hanbali schools do not focus on the ‘illah of a law to the exclusion of hikmah and contend that legal rules may be based upon their hikmah[5]. If two out of four of the main schools of jurisprudence do not agree on a principle, then we can hardly describe it as “well-settled”. Moreover, the principle is not entirely satisfactory from a rational point of view. It is true that hikmah of a law is usually some general type of benefit to be achieved or harm to be avoided and basing law on it could lead to laws being altered or added to the Shari‘ah on the basis of changing trends and expediencies. But excluding hikmah from the formulation and/or application of the law also has negative consequences: it will make law rigid and disconnected from reality. Take, for example, the following laws about fasting:

· Fast in Ramadan from dawn (when the white thread appears distinct from the black thread)

· End the fast at dusk (layl).

· If you are ill, you can omit the fast during the period of illness and make up for the omitted days sometimes in the future.

· If you are travelling, you can omit the fast during the period of travelling and make up for the omitted days sometimes in the future.

The hikmah of the first two laws is to teach us taqwa and shukr for the Qur`anic guidance. Their ‘ilal are respectively dawn and dusk. The hikmah of the last two laws is avoiding undue[6] hardship in fasting. But what are their ‘ilal? Some would say the ‘ilal are the particular hardships experienced in fasting during travel or illness. Others would say that ‘ilal are travel and illness. Still others would say that ‘illah is hardship, in which case ‘illah and hikmah would be identical. Now if hikmah is used in extending or applying these laws, there is the danger of people postponing fasting too easily. On the other hand, if hikmah is not used and only ‘ilal are used, we will make the law rigid. Thus, even though travelling these days involves none of the hardship that it used to involve in the past, we would be postponing fasts during travel while we will ignore the real hardships that some workers experience at their very demanding jobs during fasting. Indeed, if we go only by ‘ilal alone we would have to insist that those who are neither traveling nor sick should fast from dawn to dusk even in regions close to the poles where the days are weeks or months long!!! It is only by using the hikmah behind the laws of fasting that we would avoid that ridiculous conclusion. Thus, the principle that in applying the laws we should go only by ‘ilal and not by hikmah cannot be taken absolutely.

For laws to be able to address the real needs of the society it is essential that hikmah is given the primary role in their formulation and application. The danger of opening laws to changes on the basis of changing trends and expediencies should be avoided by a process of careful collective debate among knowledgeable people before formulating and applying laws.

Regarding Usmani’s third point, we note that it assumes the very thing that needs to be proved, namely, that ‘illah for the prohibition of riba is “the excess claimed over and above the principal in a transaction of loan”. Where is this ‘illah mentioned in the Qur`an? True the very word riba means increase or excess. But no one would say that every increase or excess is riba. For example, an excess given voluntarily at the time of paying back the loan is not riba (see Chapter VI), which is perhaps the reason Usmani talks about “excess claimed”. But even every “claimed” excess is not prohibited. For example, if a loan is given in a muqaradah arrangement and generates a profit, the lender can certainly claim an excess. But that excess is not riba. We therefore need to qualify excess by further conditions, e.g. the excess is fixed in advance. Thus the literal meaning of the word riba does not by itself tell us about the ‘illah of the prohibition. We have to derive it from the Qur`anic usage of the word riba and statements prohibiting it.

As for the Qur`anic usage of the word, we have already shown at length that the Qur`an does not define the term and therefore uses it in the sense in which it was used in pre-Islamic times and this pre-Islamic sense does not equate riba with every type of interest but to the particular interest imposed when the loan cannot be paid on the due date.

As for the Qur`anic statements about riba, note that the Qur`an takes it for granted that riba is zulm on the borrower. This means that the Qur`an assumes zulm to be a necessary and integral part of riba. Hence zulm can very justifiably be considered the ‘illah of the prohibition of riba. That is, zulm is the ‘illah and avoiding zulm is the hikmah of this prohibition. But even if zulm is not an inherent attribute of riba or ‘illah of its prohibition, there should be some clear connection between the hikmah of avoiding zulm and the ‘illah of the prohibition of riba. This type of connection is found in other cases. For example, take the two instances mentioned by Usmani: prohibition of crossing red light and prohibition of drinking. In the first case, the connection between ‘illah (red light) and hikmah (avoiding accidents) is clearly recognizable as also in the second case, where ‘illah is intoxication and hikmah is avoiding harm to a person’s relationship with God (by failing to remember him) and with other people (by leading to fights). We can clearly see that if people started to cross red lights there will be increase in accidents and if people start getting intoxicated there will be increase in fights and decrease in proper remembrance of Allah. But where can one see any clear connection between the hikmah of avoiding zulm in case of the prohibition of riba and the ‘illah suggested by Usmani (“the excess claimed over and above the principal in a transaction of loan”)? The only way to connect hikmah and ‘illah would be to take the ‘illah to be either zulm or the pre-Islamic definition of riba as excess claimed when a loan cannot be paid.

II) ZULM IS A “RELATIVE AND AMBIGUOUS TERM”

The second argument given by Usmani to support the view that the Qur`anic reference to zulm should not enter into our definition of riba or the ‘illah of its prohibition is:

“Zulm (injustice) is a relative and rather ambiguous term, the exact definition of which is very difficult to ascertain. Every person may have his own view about what is or what is not zulm. All the disputing political and economic systems of the world, in fact, claimed to abolish zulm, but what was regarded as zulm in one system has been held as justified in another. The communist theory of economy is of the firm view that the private property in itself is a zulm, while the capitalist theory asserts that abolishing private property is the zulm. Such an ambiguous term is not competent to be the ‘illah of a particular law.”

In regard to this argument, let us first observe that the Qur`an talks about zulm on the borrower or lender. If loan transactions do not cause zulm on the borrowers and lenders, then they will not cause zulm on the society at large. Also, riba causes zulm only to the borrower. Hence we need to restrict ourselves to the effect of a loan transaction on the borrower only and examine which type of lending arrangements have an element of zulm on the borrower.

It is true that the decision as to whether a given arrangement constitutes zulm on the borrower may in some cases be difficult but that is a problem that arises in almost all cases of formulating and interpreting laws. Almost every law has terms whose meaning is clear in some situations but not clear in other situations. Take for example the prohibition of khamr. As we noted earlier many fruit juices have some quantity of alcohol. At what point a juice becomes khamr? Furthermore, the law states that in case one is forced by necessity one can drink khamr “provided there is no wilful disobedience nor transgression of due limits” (ghayr bagh wa ghayr ‘ad, see 2:173, where this rule is stated for prohibited foods such as the meat of swine or a dead animal but by analogy can be extended to khamr). How we will determine “forced by necessity” and “transgression of due limits”? We earlier talked about ‘illah but in many cases determination of ‘illah is subject to uncertainty and differences of opinion. For example, some ahadith say that one should not exchange dates with dates, wheat with wheat, barley with barley and salt with salt except on the spot and in equal quantity. Now what is the ‘illah of this law? Some fuqaha say the ‘illah is “being exchanged by weight or measure” so that the rule of exchanging on the spot and in equal measure would apply to any two things of the same type when they are exchanged by weight or measurement, e.g. cloth, iron. Some say that ‘illah is edibility, so that the rule would apply to all fruits, vegetables etc. Still others combine the two, so that eggs, which are sold by number and not weight or measure, are exempt from the rule. Furthermore, as noted earlier, some fuqaha say that applicability of laws is determined only by ‘ilal while others contend that it can be determined by hikam.

The situation is no different with zulm in interest-based arrangements. There are cases when we can clearly see zulm on the borrower, e.g. imposing a 100% increase on the loan that a poor borrower cannot pay. There are other cases when we can clearly see that there is no zulm on the borrower, e.g. when the borrower takes a loan on interest to buy a house when the monthly payments are comparable to the monthly rent. In-between there may be cases when it is difficult to determine whether the borrower is suffering zulm.

III) LIMITATION OF HUMAN UNDERSTANDING

Usmani’s third argument is based on Qur`an 2:275, in which the riba eaters say that sale is like riba. Usmani notes that the Qur`an does not respond to this statement by any economic analysis but simply says that God has permitted sale and prohibited riba. This, Usmani argues, means that the knowledge of zulm in some lending arrangements is not accessible to human beings and therefore it should not enter into a discussion of what is riba. A response to this argument has already been given in Chapter III.

IV) “EVIL EFFECTS” OF RIBA

The last argument given by Usmani consists of some evidence to show that interest has several evil effects that make it a source of zulm in all its forms. Before examining the evil consequences of interest mentioned by Usmani we make some general comments about the weakness of the approach.

1) We need to look at the positive consequences of interest along with its negative consequences just as we need to consider both positive and negative consequences of banning all interest. Most actions or systems have both. We prohibit a thing if its negative consequences are markedly more than its positive consequences and permit it in the opposite case. Hence to ban all interest we need to show that an interest-free system gives in general more positive results than any system that allows interest in some forms. In particular, before deducing from any of its negative consequences that interest is bad in all its forms, we should explore whether combining interest-based lending with some of the other ideas that have been developed around the subject of “Islamic banking” may be much better than banning interest altogether. It is possible that the negative consequences noticed in modern interest-based economies may be the result of the way interest is handled in those economies and not because all interest is bad and a source of zulm. It may be that interest allowed in a more limited way with suitable controls would not have those or other negative consequences.

2) Economies are complex systems operated by imperfect human beings. No matter what economic system we employ it is bound to have problems. We need to continuously address those problems and try to find solutions. Usmani is willing to recognize this in case of a system banning all interest. Thus in addressing the problem that in a Musharakah arrangement the active partner could dishonestly show smaller profits or even loss, Usmani says:

It is, no doubt, a valid apprehension, especially in societies where corruption is the order of the day. However, solution to this problem is not as difficult as is generally believed or exaggerated. (214-215)

In this same spirit we should admit that interest-based economies can have their own unique problems for which solutions may not be as difficult as we might think.

3) The hard reality not duly faced in Usmani’s criticism of interest is that many interest-based economies such as Japan, North America and West Europe are prosperous where unemployment is less than 10% and more than 95% people have basic necessities of life and more than 80% have comfortable lives. To regard all this as a bubble created by interest and waiting to burst is a dangerous oversimplification --dangerous because it shows a lack of willingness or ability to face economic realities, which cannot but harm our Muslim economies.

4) Usmani supports his contentions with quotations from some Muslim and non-Muslim economists and financial experts. But a large number of other experts have argued, often using hard data, in the opposite direction.

5) Even if it is established that interest-free economy is more beneficial in creating prosperity and fairer distribution of wealth, this would not prove that interest is haram in all its forms. For, there are permissible things that may not provide the best alternative.

Let us now examine some of the evil consequences of interest that Usmani has mentioned.

(a) Evil Effects on Allocation of Resources

“Loans in the present banking system are advanced mainly to those who, on the strength of their wealth, can offer satisfactory collateral. … ‘The banking system thus tends to reinforce the unequal distribution of capital.’”

When loan is not granted on humanitarian grounds, it is natural that a creditor should ensure that there is a high chance of it being returned with some profit. To do otherwise would result in waste of capital and would be harmful for economy. Even banks operating on some interest-free basis would and should as a rule invest in businesses that have some indications of profitability.

But banks with interest-based operation do help in the distribution of wealth more widely. Thus the loans for buying houses on mortgage enable working people, by no means rich, to become property owners. This property can later be used as collateral to gain loans for establishing small business. In addition, these banks also help in the distribution of wealth by paying interest on relatively small deposits.

It is true that very poor people would not be helped by banks. But this situation has a simple solution in an Islamic society: government or private charitable organizations can use part of zakah and other sadaqat to advance interest-free loans for helping the poor get on their feet.

(b) Evil Effects on Production

Since in an interest-based system funds are provided on the basis of strong collateral and the end-use of the funds does not constitute the main criterion for financing, it encourages people to live beyond their means. The rich people do not borrow for productive projects only, but also for conspicuous consumption. Similarly, governments borrow money not only for genuine development programs, but also for their lavish expenditure and for projects motivated by their political ambitions rather than being based on sound economic assessment. Non-project-related borrowings, which were possible only in an interest-based system have thus helped in nothing but increasing the size of [Pakistani] debts to a horrible extent. According to the budget of 1998/99 in [Pakistan] 46 percent of the total government spending is devoted to debt-servicing, while only 18% is allocated for development which includes education, health and infrastructure. (Para 164)

Again the problem can be solved without banning interest altogether: Banks may be required to give only “project-related” loans. Loans for consumption may be banned from interest-based banking. In order to help the poor buy necessary items the loan could be advanced by charitable banks proposed above.

(c) Evil Effects on Distribution

… when business is financed on the basis of interest, it may bring injustice either to the borrower if he suffers a loss, or to the financier if the debtor earns huge profits. Although both situations are equally possible in an interest-based system, and there are many examples where the payment of interest has brought total ruin to the small traders, yet in our present banking system, the injustice brought to the financier is more pronounced and much more disturbing to the equitable distribution of wealth.

In the context of modern capitalist system, it is the banks which advance depositors' money to the industrialists and traders. Almost all the giant business ventures are mostly financed by the banks and financial institutions. In numerous cases the funds deployed by the big entrepreneurs from their own pocket are much less than the funds borrowed by them from the common people through banks and financial institutions. If the entrepreneurs having only ten million of their own, acquire 90 million from the banks and embark on a huge profitable enterprise, it means that 90% of the projects is created by the money of the depositors while only 10% was generated by their own capital. If these huge projects bring enormous profits, only a small proportion (of interest which normally ranges between 2% to 10% in different countries) will go to the depositors whose input in the projects was 90% while all the rest will be secured by the big entrepreneurs whose real contribution to the projects was not more than 10%. Even this small proportion given to the depositors is taken back by these big entrepreneurs, because all the interest paid by them is included in the cost of their production and comes back to them through the increased prices. The net result in this case is that all the profits of the big enterprises is earned by the persons whose own financial input does not exceed 10% of the total investment, while the people whose financial contribution was as high as 90% get nothing in real terms, because the amount of interest given to them is often repaid by them through the increased prices of the products, and therefore, in a number of cases the return received by them becomes negative in real terms. (165-166)

This ignores several important points:

i) The rate of interest charged from the borrowing company (entrepreneur) and the one given to the depositors is determined to an appreciable extent by the market forces – how much average profit businesses generate and how much cash the banks can attract from depositors. This tends to reduce the gap between the profits generated and interest paid to the depositors. Government can introduce further controls to reduce the gap.

ii) The borrowing company may contribute only 10% of the cash requirements of a business venture but it also contributes all the expertise, experience, and organizational skill and possibly other things, without which there would be no profit for the depositors to share in the form of interest.

iii) The entrepreneur takes a much bigger risk of a loss than do the depositors. The only risk the depositors take is that their bank may incur such huge losses that the depositors may not receive back part or whole of their money. This does not happen very often. Depositors willing to share greater risk with the entrepreneurs can invest in stocks and get a greater share of the profits made by businesses.

iv) For the purpose of what share of profit is justifiable for the borrowing company one can compare the arrangement between the bank and the borrowing company to a muqaradah arrangement in which, according to fuqaha`, any percentage of profit can be agreed for the ‘amil (borrowing company). Under proper controls from the government and the markets, the entrepreneur as the ‘amil may not have more than half the share of the profit, which is perfectly acceptable in Islamic banking. Thus suppose a company borrows 90 million at 5% annual rate and contributes 10 million. Under proper controls the average percentage profit made by businesses cannot be too much higher than 5%. Let us assume that it is 8%. In that case, the company’s expected profit would be 8 million. Out of this 0.05(90) = 4.5 million will go to the bank. The company deserves 0.5 million for its 10 million investment just like the bank. Hence the company as the ‘amil makes 3 million out of 8 million total profit. This would be quite acceptable in accordance with the views of fuqaha.

(d) Expansion of Artificial Money and Inflation

This phenomenon [of inflation and disconnect between the money supply and goods and services actually produced] is aggravated to a horrible extent by the well-known characteristic of the modern banks normally termed as "money creation." Even the introductory books of economics usually explain, often with complacence, how the banks create money. This apparently miraculous function of the banks is sometimes taken to be one of the factors that boost production and bring prosperity. But the illusion underlying this concept, is seldom unveiled by the champions of modern banking. (171-172)

These ideas are derived from writers who are more concerned with creating sensations or serve some other agenda rather than bringing to light actual economic reality. Below I give some figures about one interest-based economy – the Canadian economy – from official sources: Statistics Canada and Bank of Canada review. This table speaks of created money. Indeed, it shows that for every dollar in bank vaults in cash the banks created $357 of credit. This does not, however, mean that for every real dollar there are 357 dollars in circulation that have no reality. If this were so, there will be rampant inflation in Canada. But the same table shows that from 1995 to 1999 the average annual inflation rate was only 1.3%. This is because behind the “created money” there lie real assets such as buildings and goods. This may be seen by comparing the total money supply of 589.1 billion (including the created money) with GDP of 952.7 billion.

TABLE

GDP or Gross Domestic Product & Real GDP Growth (1999):  $952.7 billion   &   3.5 % (Statistics Canada)

The Money Supply (1999) & Inflation (Statistics Canada)

Government Created Money (bills & coins, i.e. cash):  approx $36 billion                                   Note: no interest attached

¶ Bank Created Money, i.e. Bank Credit:  $557 billion  (94.6 % of total)                 Note: created with interest attached

Total Money Supply:  ($36 billion – $3.893 billion ***) + $557 billion = $589.1 billion

Average Annual Inflation from 1995 to 1999:  1.3 %

---

The Chartered Banks: The Royal Bank, The Bank of Montreal, CIBC, etc.

Total Bank Assets:  $1392.9 billion                                                             (from Bank of Canada Review for June 1999)

Cash (bills & coins) in bank vaults:  $3.893 billion                                        (from Bank of Canada Review for June 1999)

¶ Banks' Leverage:  $1392.9 billion ÷ $3.893 billion = 358                (i.e. banks create $357 of credit for every $1 of cash)

(e) The Debt Problem

Once the interest is banned, the role of "loans" in commercial activities becomes very limited, and the whole financing structure turns out to be equity-based and backed by real assets. In order to limit the use of loans, the Shar'iah has permitted to borrow money only in cases of dire need, and has discouraged the practice of incurring debts for living beyond one's means or to grow one's wealth. The well-known event that the Holy Prophet, Sall-Allahu alayhi wa sallam, refused to offer the funeral prayer (salat-ul janazah) of a person who died indebted was, in fact, to establish the principle that incurring debt should not be taken as a natural or ordinary phenomenon of life. It should be the last thing to be resorted to in the course of economic activities. This is one of the reasons for which interest has been prohibited, because, given the prohibition of interest, no one will be agreeable to advance a loan without a return for unnecessary expenses of the borrower or for his profitable projects. It will leave no room for unnecessary expenses incurred through loans. The profitable ventures, on the other hand, will be designed on the basis of equitable participation and thus the scope of loans will remain restricted to a narrow circle. (159)

Conversely, once the interest is allowed, and advancing loans, in itself, becomes a form of profitable trade, the whole economy turns into a debt-oriented economy which not only dominates over the real economic activities and disturbs its natural functions by creating frequent shocks, but also puts the whole mankind under the slavery of debt. It is no secret that all the nations of the world, including the developed countries, are drowned in national and foreign debts to the extent that the amount of payable debts in a large number of countries exceeds their total income. Just to take one example of UK, the household debt in 1963 was less than 30% of total annual income. In 1997, however, the percentage of household debt rose up to more than 100% of the total income. It means that the household debt throughout the country, embracing rich and poor alike, represents more than the entire gross annual incomes of the country. Consumers have borrowed, and made purchases against their future earnings, equivalent to more than the entirety of their annual incomes. Peter Warburton, one of the UK's most respected financial commentators and a past winner of economic forecasting awards, has commented on this situation as follows:

"The credit and capital markets have grown too rapidly, with too little transparency and accountability. Prepare for an explosion that will rock the western financial system to its foundation." (160)

The observation here that personal debt is increasing in many countries including those with economic wealth is rising is valid. It is also true that this rising debt is a serious enough problem that should be addressed. But the interpretation of these facts given in the above quotation is erroneous. To begin with there are several ratios one can use to assess the indebtedness of a person, but not of all them can be used with their face values. One such commonly used ratio is the debt-to-income ratio, which is the ratio (given in percentage) of monthly required repayment of debt to the monthly income of the borrower. This cannot be more than 100 on average, since the reluctance of lending institutions to advance loans increases rapidly as this ratio rises above 30%. Another way is the ratio (again given in percentage) of total debt to total disposable income (income after taxes). This can exceed 100, but it cannot be taken at face value. To see this take two persons, each earning $40000 per year after taxes. One lives in a rented place and has no debt at all. The other is living in a house on mortgage on which the outstanding loan is $60,000 and there is no other debt. Both are paying the same monthly amount for their accommodation. In the first case the debt to income ratio is 0% and in the second case it is 60000/40000 or 150%. By looking at the ratios, the second person looks very much worse off, but in reality his economic situation may be much sounder than that of the first person, since after some years he will acquire the ownership of a house.

One may be tempted here to refer to the economic crisis of the late 2000s, which was caused by a very large number of borrowers being unable to repay their bank loans, and use it to support the view that interest-based banking is inherently harmful for economic. But as we noted earlier any economic system can run into problems because of bad practices or decisions by human beings. The economic crisis of the late 2000s was the result of banks becoming too reckless in granting loans for real estate. This problem could have been avoided if the interest is charged according to the Islamic principles (see the conclusion of Chapter III).

(C)

Ahadith Prohibiting or Cursing the Paying of Riba

As we have already noted, the Qur`an prohibits only charging riba and not paying it. There are, however, some ahadith that prohibit both. We now examine these ahadith and show that they do not come from the Prophet of Islam.

Recall the principle explained in the Introduction that laws are promulgated in a public way so as to reach a large number of people. Hence every law established by God and/or his Messenger is expected to be known to a large number of Companions who would then pass this knowledge to an even greater number of Successors and so on. It follows that if a hadith containing a law really comes from the Prophet we can be reasonably certain that it was well-known from the earliest times. If this is not the case, that is, if we can raise reasonable doubts as to whether the hadith has been well known from the earliest times, then the hadith does not come from the Prophet of Islam. In case of ahadith prohibiting or cursing the paying of riba, we can raise several such reasonable doubts.

First, in the Qur`an riba is interest in a lending arrangement that is a serious case of zulm on the borrower. More specifically it is interest, usually excessive, imposed when the loan cannot be paid except possibly with great difficulty. In such a situation, the borrower would prefer to pay off the loan rather than face the prospect of ever increasing debt. Only under compulsion he would agree to pay riba. Within this Qur`anic perspective it is not meaningful to prohibit paying of riba; only the prohibition of receiving riba makes sense. Hence the ahadith containing this prohibition come from a perspective other than that of the Qur`an. This raises a serious doubt about their authenticity.

Second, our earliest source of ahadith that has relevance to Islamic law is Muwatta and this source does not contain any hadith that prohibits paying of riba. This raises doubt as to whether the hadith was well known and well accepted in the second century.

Third, narrations of ahadith are found in many third- or fourth-century books of ahadith starting from Bukhari and Muslim but no narration is found in more than a few of them. In particular, there is no narration on which Bukhari and Muslim agree.

Fourth, the ahadith are narrated from only a few narrators in each of the first two or three generations and this again raises doubt whether the hadith was well known from the beginning.

Fifth, an examination of the ahadith reveals some contradictions and some alterations that do not inspire any confidence in the transmission process of the ahadith.

In order to establish some of the above points, especially the last one, we now look at these ahadith more closely. The ahadith in question are mostly related in the name of two Companions: Abu Juhayfah (d. 74) and ‘Abd Allah bin Mas‘ud (d. 32). One hadith in Muslim comes from Jabir bin ‘Abd Allah and another in Nasa`i from ‘Ali.. We examine the ahadith under the name of the Companion in whose name they are narrated:

Abu Juhayfah

Narrations from Abu Juhayfah are found in Bukhari 2084=3/440, 1944=3/299, 4928=7/259, 5505=7/845, and Ahmad 18007. They all have the isnad: from Shu‘bah from ‘Awn from his father Abu Juhayfah, that is, only from one narrator in each of the first three generations. One of these narrations reads:

حَدَّثَنَا حَجَّاجُ بْنُ مِنْهَالٍ حَدَّثَنَا شُعْبَةُ قَالَ أَخْبَرَنِي عَوْنُ بْنُ أَبِي جُحَيْفَةَ قَالَ رَأَيْتُ أَبِي اشْتَرَى حَجَّامًا فَأَمَرَ بِمَحَاجِمِهِ فَكُسِرَتْ فَسَأَلْتُهُ عَنْ ذَلِكَ قَالَ إِنَّ رَسُولَ اللَّهِ صَلَّى اللَّهُ عَلَيْهِ وَسَلَّمَ نَهَى عَنْ ثَمَنِ الدَّمِ وَثَمَنِ الْكَلْبِ وَكَسْبِ الْأَمَةِ وَلَعَنَ الْوَاشِمَةَ وَالْمُسْتَوْشِمَةَ وَآكِلَ الرِّبَا وَمُوكِلَهُ وَلَعَنَ الْمُصَوِّرَ

Hajjaj bin Minhal related to us: Shu‘bah related to us saying: ‘Awn bin Abi Juhayfah informed me saying:

I saw my father buying a slave whose profession was cupping, and ordered his instruments (of cupping) to be broken. I asked him about it. He said, "God’s Messenger prohibited taking money for blood (cupping), the price of a dog, and the earnings of a slave-girl by prostitution; he cursed her who tattoos and her who gets tattooed, the eater of riba and its feeder, and cursed the maker of pictures." (Bukhari 2084=3/440)

This narration is primarily about charging price for cupping, yet what the hadith says about cupping is contradicted by other ahadith, including the following two found in Bukhari:

حَدَّثَنَا عَبْدُ اللَّهِ بْنُ يُوسُفَ أَخْبَرَنَا مَالِكٌ عَنْ حُمَيْدٍ عَنْ أَنَسِ بْنِ مَالِكٍ رَضِيَ اللَّهُ عَنْهُ قَالَ حَجَمَ أَبُو طَيْبَةَ رَسُولَ اللَّهِ صَلَّى اللَّهُ عَلَيْهِ وَسَلَّمَ فَأَمَرَ لَهُ بِصَاعٍ مِنْ تَمْرٍ وَأَمَرَ أَهْلَهُ أَنْ يُخَفِّفُوا مِنْ خَرَاجِهِ

‘Abd Allah bin Yusuf related to us: Malik informed us from Humayd from Anas bin Malik: Abu Taybah cupped God’s Messenger so he ordered that he be paid one sa‘ of dates and ordered his masters to reduce his tax. (Bukhari 1960=3/315)

حَدَّثَنَا مُسَدَّدٌ حَدَّثَنَا خَالِدٌ هُوَ ابْنُ عَبْدِ اللَّهِ حَدَّثَنَا خَالِدٌ عَنْ عِكْرِمَةَ عَنْ ابْنِ عَبَّاسٍ رَضِيَ اللَّهُ عَنْهُمَا قَالَ احْتَجَمَ النَّبِيُّ صَلَّى اللَّهُ عَلَيْهِ وَسَلَّمَ وَأَعْطَى الَّذِي حَجَمَهُ وَلَوْ كَانَ حَرَامًا لَمْ يُعْطِهِ

Musaddad related to us: Khalid, that is, Ibn ‘Abd Allah related to us: Khalid related to us from ‘Ikrimah from Ibn 'Abbas who said: Once the Prophet got himself cupped and paid the one who cupped. If it had been haram (to receive payment for cupping), the Prophet would not have paid him. (Bukhari 1961=3/316)

In these ahadith the Prophet himself paid for cupping but the ahadith in the name of Abu Juhayfah prohibit that very action. One may not use the concept of abrogation to explain the contradiction. In case of abrogation we need to know which order abrogates the other, since otherwise we would not know what to do: pay for cupping or not to pay. And in the ahadith in question there is no indication of any kind that any one of them is abrogating the other. Indeed, the words attributed to Ibn ‘Abbas in Bukhari 1961 – “If it had been haram (to receive payment for cupping), the Prophet would not have paid him.” – suggest that the possibility of abrogation was far from his mind.

It is also very interesting and instructive that there is a narration in the name of Abu Juhayfah from which all references to cupping has been removed.

حَدَّثَنَا آدَمُ حَدَّثَنَا شُعْبَةُ حَدَّثَنَا عَوْنُ بْنُ أَبِي جُحَيْفَةَ عَنْ أَبِيهِ قَالَ لَعَنَ النَّبِيُّ صَلَّى اللَّهُ عَلَيْهِ وَسَلَّمَ الْوَاشِمَةَ وَالْمُسْتَوْشِمَةَ وَآكِلَ الرِّبَا وَمُوكِلَهُ وَنَهَى عَنْ ثَمَنِ الْكَلْبِ وَكَسْبِ الْبَغِيِّ وَلَعَنَ الْمُصَوِّرِينَ

Adam related to us: Shu‘bah related to us: ‘Awn bin Abi Juhayfah related to us from his father: The Prophet cursed her who tattoos or gets tattooed, the eater of riba and its feeder. And he prohibited taking the price of a dog, and the money earned by prostitution, and cursed the makers of pictures. (Bukhari 4928=7/259)

In this narration there is neither any mention of Abu Juhayfah buying a slave who cupped nor of any mention of the prophetic prohibition of cupping for money. Since this narration also comes from Shu‘bah and in most narrations from Shu‘bah cupping is not only mentioned but is also central element, it is highly likely that it is someone after Shu‘bah, possibly the narrator Adam (d. 220) who removed the references. And it is not hard to see why this was done: since there was evidence that the Prophet paid for cupping, the part of the hadith talking about the payment for cupping was removed. This shows that even about two centuries after the Prophet, when the scholarly standards were well established, narrators could remove key elements of a hadith and radically change it.

Thus it is doubtful that the prohibition of charging for cupping comes from the Prophet. But if the prohibition of charging for cupping is doubtful, then any of the other prohibitions also becomes doubtful, including the one about paying riba, since cupping is the most central element in the hadith of Abu Juhayfah. There is also a possibility that the list of prohibited actions mentioned in the hadith of Abu Juhayfah have been enlarged later by the addition of some other prohibitions not originally found in the hadith. This possibility is raised by the fact that Abu Da`ud 3022 with the same isnad as Bukhari 1944=3/299 does not mention riba at all and prohibits only the price of a dog. Riba is also not mentioned in Ahmad 18014 (with the isnad Waki‘ – Yazid – ‘Awn – Abu Juhayfah), which prohibits only the earnings from prostitution. It is possible that Abu Da`ud 3022 and Ahmad 18014 are abbreviations of the longer ahadith and omit all but one of the prohibitions, but if parts could be omitted, then some could be added.

‘Abd Allah bin Mas‘ud

We have the following three narrations prohibiting the paying of riba that reportedly come from the Companion ‘Abd Allah bin Mas‘ud:

I)

حَدَّثَنَا قُتَيْبَةُ حَدَّثَنَا أَبُو عَوَانَةَ عَنْ سِمَاكِ بْنِ حَرْبٍ عَنْ عَبْدِ الرَّحْمَنِ بْنِ عَبْدِ اللَّهِ بْنِ مَسْعُودٍ عَنْ ابْنِ مَسْعُودٍ قَالَ لَعَنَ رَسُولُ اللَّهِ صَلَّى اللَّهُ عَلَيْهِ وَسَلَّمَ آكِلَ الرِّبَا وَمُؤْكِلَهُ وَشَاهِدَيْهِ وَكَاتِبَهُ قَالَ وَفِي الْبَاب عَنْ عُمَرَ وَعَلِيٍّ وَجَابِرٍ وَأَبِي جُحَيْفَةَ قَالَ أَبُو عِيسَى حَدِيثُ عَبْدِ اللَّهِ حَدِيثٌ حَسَنٌ صَحِيحٌ

Qutaybah related to us: Abu ‘Awanah related to us from Simak bin Harb from ‘Abd al-Rahman bin ‘Abd Allah bin Mas‘ud from Ibn Mas‘ud who said: The Messenger of God cursed the eater of riba and its feeder and the two witnesses to it and the one who writes it. (Tirmidhi 1127; also found in Abu Da`ud 2895, Ibn Majah 2268, Ahmad 3539, 3550, 3618, 4099, all from Simak from ‘Abd al-Rahman bin ‘Abd Allah bin Mas‘ud from Ibn Mas‘ud)

II)

حَدَّثَنَا عُثْمَانُ بْنُ أَبِي شَيْبَةَ وَإِسْحَقُ بْنُ إِبْرَاهِيمَ وَاللَّفْظُ لِعُثْمَانَ قَالَ إِسْحَقُ أَخْبَرَنَا وَقَالَ عُثْمَانُ حَدَّثَنَا جَرِيرٌ عَنْ مُغِيرَةَ قَالَ سَأَلَ شِبَاكٌ إِبْرَاهِيمَ فَحَدَّثَنَا عَنْ عَلْقَمَةَ عَنْ عَبْدِ اللَّهِ قَالَ لَعَنَ رَسُولُ اللَّهِ صَلَّى اللَّهُ عَلَيْهِ وَسَلَّمَ آكِلَ الرِّبَا وَمُؤْكِلَهُ قَالَ قُلْتُ وَكَاتِبَهُ وَشَاهِدَيْهِ قَالَ إِنَّمَا نُحَدِّثُ بِمَا سَمِعْنَا

‘Uthman bin Abi Shaybah & Ishaq bin Ibrahim – Jarir – Mughirah -- who said: Shibak asked Ibrahim al-Nakh’i: He related to us from ‘Alqamah from ‘Abd Allah (bin Mas‘ud) who said that God's Messenger cursed the one who accepted riba and the one who paid it. I asked about the one who writes it, and the two witnesses to it. He said: We narrate what we have heard. (Muslim 2994)

III)

أَخْبَرَنَا إِسْمَعِيلُ بْنُ مَسْعُودٍ قَالَ حَدَّثَنَا خَالِدٌ عَنْ شُعْبَةَ عَنْ الْأَعْمَشِ قَالَ سَمِعْتُ عَبْدَ اللَّهِ بْنَ مُرَّةَ يُحَدِّثُ عَنْ الْحَارِثِ عَنْ عَبْدِ اللَّهِ قَالَ آكِلُ الرِّبَا وَمُوكِلُهُ وَكَاتِبُهُ إِذَا عَلِمُوا ذَلِكَ وَالْوَاشِمَةُ وَالْمَوْشُومَةُ لِلْحُسْنِ وَلَاوِي الصَّدَقَةِ وَالْمُرْتَدُّ أَعْرَابِيًّا بَعْدَ الْهِجْرَةِ مَلْعُونُونَ عَلَى لِسَانِ مُحَمَّدٍ صَلَّى اللَّهُ عَلَيْهِ وَسَلَّمَ يَوْمَ الْقِيَامَةِ

Isma‘il bin Mas‘ud informed us: Khalid related to us from Shu‘bah from al-‘Amash who said: I heard ‘Abd Allah bin Murrah relate from al-Harith from ‘Abd Allah bin Mas‘ud who said: Eater of al-riba and its feeder and its writer and its two witnesses when they know about it … are cursed on the tongue of Muhammad (salla allah ‘alayhi wa sallam) on the day of judgment. (Nasa`i 5013; also Ahmad 3687, 3881, 4196)

Note the following points: In the first narration not only the eater and feeder of riba are cursed but also the witnesses and the scribe. But in the second narration when one of the narrators is asked about the cursing of “one who writes it, and the two witnesses to it”, he says: “we narrate what we have heard”, in other words, he never heard about the cursing of the scribe and the witnesses.

Unlike other narrations, in the third narration the cursing by the Prophet in this world is not reported. Instead we are told that the Prophet will curse these people on the judgment day. This illustrates that just as some parts may be added or omitted from a hadith, others may be altered.

All this makes the prohibition of giving riba doubtful. One may say that even if some additions, omissions, and alterations were made, the prohibition of giving riba is a common part of all these narrations. The problem is that when additions, omissions, and alterations can take place, we cannot place full confidence in the reliability of the transmission process, since by a series of such changes a hadith can change with time beyond recognition.

Jahir bin ‘Abd Allah

In addition to Abu Juhayfah and Ibn Mas‘ud, the prohibition of paying riba is also attributed to Jabir, but his hadith is missing from almost all books of ahadith. In the Hadith Encyclopedia it is found as Muslim 2995 and Ahmad 13744.

The hadith of Jabir reads:

حَدَّثَنَا مُحَمَّدُ بْنُ الصَّبَّاحِ وَزُهَيْرُ بْنُ حَرْبٍ وَعُثْمَانُ بْنُ أَبِي شَيْبَةَ قَالُوا حَدَّثَنَا هُشَيْمٌ أَخْبَرَنَا أَبُو الزُّبَيْرِ عَنْ جَابِرٍ قَالَ لَعَنَ رَسُولُ اللَّهِ صَلَّى اللَّهُ عَلَيْهِ وَسَلَّمَ آكِلَ الرِّبَا وَمُؤْكِلَهُ وَكَاتِبَهُ وَشَاهِدَيْهِ وَقَالَ هُمْ سَوَاءٌ

Muhammad ibn al-Sabbah & Zuhayr bin Harb & ‘Uthman ibn Abi Shaybah related to us saying: Hushaym related to us: Abu al-Zubayr informed us from Jabir who said that God's Messenger cursed the eater of riba and its feeder, and one who records it, and the two witnesses, and he said: They are all equal. (Muslim 2995)

Note that the words “they are all equal” are not found in other narrations. It is almost certainly an addition.

‘Ali bin Abi Talib

أَخْبَرَنِي زِيَادُ بْنُ أَيُّوبَ قَالَ حَدَّثَنَا هُشَيْمٌ قَالَ أَنْبَأَنَا حُصَيْنٌ وَمُغِيرَةُ وَابْنُ عَوْنٍ عَنْ الشَّعْبِيِّ عَنْ الْحَارِثِ عَنْ عَلِيٍّ أَنَّ رَسُولَ اللَّهِ صَلَّى اللَّهُ عَلَيْهِ وَسَلَّمَ لَعَنَ آكِلَ الرِّبَا وَمُوكِلَهُ وَكَاتِبَهُ وَمَانِعَ الصَّدَقَةِ وَكَانَ يَنْهَى عَنْ النَّوْحِ أَرْسَلَهُ ابْنُ عَوْنٍ وَعَطَاءُ بْنُ السَّائِبِ

Ziyad bin Ayyub informed me saying: Hushaym related to us saying: Husayn and Mughirah and Ibn ‘Awn informed us from al-Sha ‘bi from Harith from ‘Ali that the Messenger of God cursed the eater of riba and its feeder and one who writes it and one he prevents sadaqah and he used to prohibit wailing. (Nasa`i 5014)

The attribution of the hadith to Jabir and ‘Ali may be the result of an alteration in the isnad. We have seen above that additions, omissions and alterations of wording took place in the contents of ahadith during their transmission in earlier centuries. Similar additions, omissions and alterations could also take place in asanid, resulting in an increase in the number of asanid for a hadith, giving the false impression that it was narrated by several narrators in each generation. The additions or omissions or alterations in asanid could also turn non-sahih isnad into a sahih one, increasing falsely the reliability of the hadith.

In view of all that has been said above, we conclude that the prohibition of paying riba is not one of the laws given by the Prophet.

(D)

Tafsir of 30:39 and 2:275

The meaning of most of the Qur`anic verses about riba are fairly clear. But two of these verses raise some issues that need to be resolved.

Qur`an 30:39

وَمَا آتَيْتُمْ مِنْ رِبًا لِيَرْبُوَ فِي أَمْوَالِ النَّاسِ فَلَا يَرْبُو عِنْدَ اللَّهِ ۖ وَمَا آتَيْتُمْ مِنْ زَكَاةٍ تُرِيدُونَ وَجْهَ اللَّهِ فَأُولَٰئِكَ هُمُ الْمُضْعِفُونَ

That which you give for riba so that it may increase through the property of (other) people, will have no increase with God but that which you give as charity, seeking the Countenance of God, it is those who (do that) will get a recompense multiplied.

What you give min riba

These words raise two questions: What is meant by riba, some type of interest or gift? If riba means interest of some type, then what is given: riba or the capital?

Ibn Kathir attributes to Ibn ‘Abbas (d. 68), Sa‘id ibn Jubayr (d. 95), Ibrahim al-Nakha‘i (d. 96), Dahhak (d. 102), Mujahid (d. 105), Tawus (d. 105), and Qatadah (d. 117) the view that the word riba in this verse does not mean a type of interest but a gift offered by someone to a person with the hope that the latter will give him in return a greater gift. Ibn Jarir al-Tabari in his commentary on the verse quotes Ibn ‘Abbas as saying:

"Have you not seen a person saying to another, 'I shall certainly finance you', and then he gives to him? But this does not increase with God, because he gives to him not to please God, but to increase his wealth."

He also quotes a similar statement from Ibrahim al-Nakha‘i:

"It was in the days of jahiliyyah that one used to give money to one of his relatives to increase his wealth." (Usmani 88).

But these interpretations are not convincing and most commentators have come to hold, correctly in our opinion, the view that riba in this verse, as elsewhere in the Qur`an refers to a type of interest.

If riba is a type of interest, what is given, riba or the capital? One natural way of translating the words ma `ataytum min riba would be “what you give of riba” so that what is given is riba and those who give are borrowers. But the preposition min has many senses in Arabic, one of which is “on account of, because of, for”. This sense is found in 71:25: mi(n) ma khati`atihim ughriqu, in which min can only mean something like “because of”: they were drowned because of their sins.[7] In view of such a sense of min we can translate the words ma `ataytum min riba as “what you give (as loan) on account of or for the sake of riba” so that what is given is not riba but the capital advanced as loan to earn riba. We will see later that this interpretation makes the verse much more understandable.

In the parallel expression: ma `ataytum min zakah, it does not matter how we translate min, since it is only zakah that is given. That is, we can translate the expression as “what you give of zakah” or as “what you give for (the purpose of) zakah”.

“so that it may increase through the property of (other) people” (li yarbuwa fi amwal al-nas).

Here the relevant question is: What increases in the property of other people? It is natural to think that what increases is the same as what is given. But if what is given is riba, then it is not natural to say that “riba may increase fi amwal al-nas” since riba itself represents the increase. Moreover, elsewhere the Qur`an provides no indication that the people borrow money and pay riba in order to increase their wealth fi amwal al-nas. It is this that seems to have led some commentators, as noted earlier, to suggest that riba is not interest of any type but a gift gven to receive some benefit from people. Other commentators such as Mawdudi who identify what is given with riba paid by borrowers shift the focus from the borrowers to the lenders when they explain the meaning of increase fi amwal al-nas.

If what is given is the capital loaned, then it is the capital that increases on account of riba which is perfectly understandable. For this reason it is preferable to take what is given to be the capital and not riba.

Thus we can paraphrase the verse as follows:

That which you give for the sake of riba so that it may increase through the property of (other) people, will have no increase with God but that which you give as charity, seeking the Countenance of God, will earn a recompense multiplied.

Qur`an 2:275

الَّذِينَ يَأْكُلُونَ الرِّبَا لَا يَقُومُونَ إِلَّا كَمَا يَقُومُ الَّذِي يَتَخَبَّطُهُ الشَّيْطَانُ مِنَ الْمَسِّ ۚ ذَٰلِكَ بِأَنَّهُمْ قَالُوا إِنَّمَا الْبَيْعُ مِثْلُ الرِّبَا ۗ وَأَحَلَّ اللَّـهُ الْبَيْعَ وَحَرَّمَ الرِّبَا ۚ فَمَن جَاءَهُ مَوْعِظَةٌ مِّن رَّبِّهِ فَانتَهَىٰ فَلَهُ مَا سَلَفَ وَأَمْرُهُ إِلَى اللَّـهِ ۖ وَمَنْ عَادَ فَأُولَـٰئِكَ أَصْحَابُ النَّارِ ۖ هُمْ فِيهَا خَالِدُونَ

Those who eat riba do not stand except as stands one whom Shaytan has by the touch thrown into confusion. That is because they say: "Sale is just like riba". God has permitted trade and forbidden riba. Those who after receiving admonition from their Lord, desist, shall have what is past; their case being for God (to judge). But those who repeat (the offence) are companions of the fire: They will stay therein.

“Those who eat riba do not stand except as stands”.

The word for stand is qama (in the form yaqum(un)), which means to rise or stand. But like the English word “stand” it can also mean to exist in a certain state, as in 30:25 where it is said: “The heavens and the earth stand (taquma) by his command”. The meaning here is that the heavens and earth exist in their present state by God’s command. In the form aqama the word also means to maintain something in its (proper) state or to establish something such as salah or hudud allah (2:229-230 etc)

A crucial question in the understanding of the verse is whether yaqumun should be taken in the present (“they stand”) or future tense (“they will stand”). Taking the future tense some have understood the word to refer to the rising of the dead on the day of resurrection. This interpretation is accepted by classical interpreters such as Ibn Kathir. It is supported by a reading attributed to ‘Abd Allah ibn Mas‘ud: “Those who devor riba will not stand on the day of resurrection except as like a person whom by Shaytan …”. This probably does not mean that ‘Ibn Mas‘ud thought that originally the words “on the day of resurrection” were part of the Qur`an and they were later removed, since such an assumption will go against the evidence provided by all the extant manuscripts of the Qur`an and also calls into question the ability of God, his Messenger, and the Companions to preserve the text of the Qur`an[8]. What is meant is that in the view of Ibn Mas’ud yaqumun means “they will rise on the day of resurrection”. A similar view is also attributed to Ibn ‘Abbas. Abu Ya‘la records a saying of Ibn ‘Abbas interpreting the verse to mean that on the day of resurrection riba eaters will be recognized by the fact that they will not be able to stand except like one possessed by the devil.

Ibn Kathir and Baghawi also mention narrations of a tradition about the Prophet’s mi‘raj during which he sees riba eaters with such huge bellies that they are not able to stand. But: 1) This tradition is not found in the earlier and more reliable books. 2) Not all narrations of the tradition refer to the inability of the riba eaters to stand. 3) Those narrations that do mention the inability to stand, attribute it to huge bellies while in the Qur`an it is attributed to mental confusion caused by the touch of Shaytan. 4) A tradition in Bukhari about mi‘raj gives us a completely different type of punishment for the riba eaters: they are kept in river (of blood). If they try to get out they are made to swallow stones[9].

It is preferable to use the word in the present tense, as is done by Mawdudi, Muhammad Asad and others. The Qur`an provides no indication in the verse that the reference is to the day of resurrection and there is no other instance in which the Qur`an uses the word qama alone to refer to the resurrection of the dead without making some reference to the last day. Moreover, as we shall see the verse becomes much more understandable if we connect yaqumun to a state of the riba eaters in this life.

When used in the present tense “stand” cannot mean in a literal and physical sense but in the sense of existing in a certain state like the standing of the heavens and the earth in 30:25. That is, the word refers to the state or condition or way of living of those who eat riba.

“one whom Shaytan has thrown by the touch into confusion (yatakhabbatu)”

Shaytan often inflicts harm by misleading insinuations, but sometimes does so by his “touch”, which is no doubt to be understood in a figurative sense. It signifies a more forceful intervention than evil misleading suggestions and results in a more serious harm. Thus we read Ayyub (may peace be upon him) saying in 38:41: “Verily, Shaytan has touched me with nusb (distress) and ‘adha (torment)”.

The word takhabbata is translated variously: “drive or beat to madness”, “confound”, “prostrate”, The word primarily means to knock, hit, throw down. A derived meaning is to be lost, to wander around, to be in confusion, which can lead to the meaning of madness. The words related to takhabbata have a sense opposite to those related to qama. The latter has a sense of rising, establishing, maintaining a state, and order while the former has a sense of falling, bringing down, upsetting a state, and disorder.

In the Qur`an this verse contains the only use of a word with the root kh-b-t. In ahadith the word is also rare. In Muslim 2415 the Prophet prohibits certain actions in Makkah, including uprooting of any thorny plant and the verb used is khabata. In Abu Da`ud 1740 and Muslim 2427 and 2439 it is similarly prohibited in Madinah to fell the leaves of a tree (by beating it) (khabata) except for feeding animals. In Bukhari 6443 (9/89) and Ahmad 7837 it is said that on the day of resurrection the camels on whom zakah was not paid will strike (khabata) the faces of their owners by their hooves. In Abu Da`ud 1328, Nasa`i 5436-8 the Prophet prays: I seek God’s refuge from that the Shaytan may put me into a delusional state of mind at the time of death (`a‘udh bi allah an yatakhabbatani al-shaytan ‘ind al-mawt).

In the Qur`anic verse the best meaning is to throw into confusion, possibly but not necessarily to the point of madness. This is because the subsequent statement of the riba eaters is a case of confusion.

“That is because they say: Sale is like riba".

The confusion into which the riba eaters are thrown by Shaytan is not a punishment of their failure to distinguish between sale and riba. Rather, their inability to make this distinction is the primary manifestation of that confusion. That this confusion is caused by the touch of Shaytan means that it is not due to normal limitations from which human thinking suffers but is caused by evil tendencies: extreme insensitivity to others, selfishness, greed, and injustice.

One would expect the riba eaters to say “riba is like sale” instead of “sale is like riba”. This reversal of order is for emphasis by the riba eaters on the similarity of riba and sale.

But what did the riba eaters mean when they said sale is like riba? When two things are said to be like one another, this could be from many different angles. From what angles did the riba eaters liken sale and riba? It seems natural that this similarity of sale and riba was stated from an economical or financial point of view. But their purpose was not to make a purely economical or financial statement but to use the economic similarity of sale and riba to justify their practice of riba. As we showed in Chapter III the Qur`an does not reject the statement of the riba eaters from an economic point of view but rather condemns their use of the economic similarity between sale and riba to deduce their moral similarity.

“God has permitted sale and forbidden riba”.

It have been suggested that these words are a part of the riba eaters statement: “Sale is like riba (and yet you say) God has permitted sale and prohibited riba.” Generally, however, the words are taken, probably correctly, to be the words of God. In responding to riba eaters the Qur`an makes no economic observations but simply says that sale is permitted by God and riba is prohibited by him. This shows the Qur`an does not contest the statement of the riba eaters from an economic point of view but only from a moral point of view. It is saying: sale and riba may be similar as financial transactions but they are not similar as moral actions. The moral distinction between the two is expressed in its sharpest form: sale is halal and riba is haram. Contrary to the understanding of some, this does not mean that God has made sale halal and made riba haram by an arbitrary exercise of his will without any reasons or that the reasons are largely incomprehensible for us. It is a characteristic of the revelation brought by the Prophet of Islam that it permits exactly what is (generally) good and beneficial and prohibits exactly what is (generally) harmful and bad (7:157)[10]. Moreover, as a revelation based on fitrah its permissions and prohibitions are at some level understandable to man. Therefore it is implied here that sale is good and beneficial and therefore permitted while riba is harmful and evil and therefore prohibited.

“Those who receive admonition from their Lord and desist (from taking riba) ”

The word admonition is maw‘izah from wa‘aza, which means “to exhort, to appeal to the conscience, to warn, to admonish”. The word is not used to refer to a teaching that is unknowable except through revelation but to appealing to what people know but may not practice.

“shall have what is past”

The riba charged and paid in the past need not be returned. But riba that is due but not paid must be written off and no riba should be charged in the future.

“their case being for God (to judge)”

This means that the forgiveness of past consumption of riba is not automatic. God will judge each case. This is because the evil of riba is as clear as say torturing and murdering people and those who engaged in it in the past are guilty, although they are not legally obliged to pay all that back. Their forgiveness will depend how sincere their repentance, how much charity they practice subsequently and so on. This once again assumes that riba is viewed in the Qur`an as something whose evil is evident.

“But those who repeat are companions of the fire. They will abide therein.”

This is a severe condemnation of riba, especially if it is practiced after its evil has been clearly pointed out.

By way of summary of the above commentary we can paraphrase the verse as follows: Those who eat riba do not stand except in the state of one whom Shaytan has thrown by the touch into a big moral confusion. For they say that since sale is like riba, therefore riba is as justified as sale. Nay, the two things cannot be more different from a moral point of view. Sale is beneficial and permitted by God and riba is zulm and prohibited by him. Those who receive this admonition from their Lord and desist from taking riba shall have whatever riba they received in the past. But they did commit a great and manifest wrong and God will judge them as to how sincerely they made amends for that wrong. It is, however, certain that those who continue to eat riba after its manifest zulm has been pointed out to them are companions of the fire. They will abide therein.

(E)

Backgrounds and Chronology of the Verses about Riba

There is an element of uncertainty in dating many surahs. This uncertainty increases in case of individual passages, since verses continued to be added to surahs at different times after their initial revelation. For the four passages about riba we can establish the following dates with some probability.

30:39 – Surah 30 is Makkan and this specific verse is also Makkan; it has the style suitable for the Makkan situation when right and wrong was generally not expressed in the form of laws or commandments, but by condemning or praising.

4:161 is part of a long passage that recalls the actions of the Jews over the centuries. This passage begins with the verse: "The People of the Book ask you to bring down upon them a Book from the heaven." (4:153). Usmani comments: “It means that this series of verses was revealed at a time when Jews were abundantly present in Madinah and were in a position to argue with the Holy Prophet. Since most of the Jews had left Madinah after 4th year from Hijra, this verse seems to have been revealed before that.” The argument is far from being conclusive, since a Qur`anic passage could be revealed, as many examples show, to answer comments/objections of a single person. The Qur`an uses such comments/objections to say something to all generations of human beings. Moreover, there is extensive mention of Jews in later surahs such as al-ma`idah.

3:130. The following story in Abu Da`ud of ‘Amr ibn `Uqaysh suggests that the prohibition of riba took place before the battle of Uhud:

حَدَّثَنَا مُوسَى بْنُ إِسْمَعِيلَ حَدَّثَنَا حَمَّادٌ أَخْبَرَنَا مُحَمَّدُ بْنُ عَمْرٍو عَنْ أَبِي سَلَمَةَ عَنْ أَبِي هُرَيْرَةَ أَنْ عَمْرَو بْنَ أُقَيْشٍ كَانَ لَهُ رِبًا فِي الْجَاهِلِيَّةِ فَكَرِهَ أَنْ يُسْلِمَ حَتَّى يَأْخُذَهُ فَجَاءَ يَوْمُ أُحُدٍ فَقَالَ أَيْنَ بَنُو عَمِّي قَالُوا بِأُحُدٍ قَالَ أَيْنَ فُلَانٌ قَالُوا بِأُحُدٍ قَالَ فَأَيْنَ فُلَانٌ قَالُوا بِأُحُدٍ فَلَبِسَ لَأْمَتَهُ وَرَكِبَ فَرَسَهُ ثُمَّ تَوَجَّهَ قِبَلَهُمْ فَلَمَّا رَآهُ الْمُسْلِمُونَ قَالُوا إِلَيْكَ عَنَّا يَا عَمْرُو قَالَ إِنِّي قَدْ آمَنْتُ فَقَاتَلَ حَتَّى جُرِحَ فَحُمِلَ إِلَى أَهْلِهِ جَرِيحًا فَجَاءَهُ سَعْدُ بْنُ مُعَاذٍ فَقَالَ لِأُخْتِهِ سَلِيهِ حَمِيَّةً لِقَوْمِكَ أَوْ غَضَبًا لَهُمْ أَمْ غَضَبًا لِلَّهِ فَقَالَ بَلْ غَضَبًا لِلَّهِ وَلِرَسُولِهِ فَمَاتَ فَدَخَلَ الْجَنَّةَ وَمَا صَلَّى لِلَّهِ صَلَاةً

Musa bin Isma‘il related to us: Hammad related to us: Muhammad bin ‘Amr informed us from Abu Salamah from Abu Hurayrah that ‘Amr ibn Uqaysh had due to him some riba in pre-Islamic period; so he disliked to embrace Islam until he took it. He came on the day of Uhud and asked: Where are my cousins? They (the people) replied: At Uhud. He asked: Where is so-and-so? They said: At Uhud. He asked: Where is so-and-so? They said: At Uhud. He then put on his coat of mail and rode his horse and proceeded towards them. When the Muslims saw him, they said: Keep away, ‘Amr. He said: I have become a believer. He fought until he was wounded. He was then taken to his family wounded. Sa'd ibn Mu'adh came to his sister: Ask him (whether he fought) out of partisanship, out of anger for them, or out of anger for the sake of God. He said: Out of anger for the sake of God and his Messenger. He then died and entered Paradise. He did not offer any prayer for God. (Abu Da`ud 2175)

This hadith is not found in other books and so even if the story is substantially historical the possibility of some crucial details being totally wrong exists.

A much better indication of the date of the verse is provided by the fact that the verses before and after it refer to the battle of Uhud which took place in 2 AH. On this basis it is reasonable to conclude that the verse was revealed around 2 AH. Some commentators have also pointed out the reason why this verse was revealed in the context of the battle of Uhud. They say that the Makkan invaders had financed their army by taking usurious loans and had in this way arranged a lot of arms against Muslims. It was apprehended that it may induce the Muslims to arrange for arms on the same pattern by taking usurious loans from the people. In order to prevent them from this approach the verse was revealed containing a clear-cut prohibition of riba.” This, however, does not fit with the wording of the verse, since the verse does not prohibit taking usurious loans but giving such loans.

2:275-280. The background of the revelation of some of these verses is given by Baghawi as follows:

وقال مقاتل: نزلت في أربعة إخوة من ثقيف، مسعود وعبد ياليل وحبيب وربيعة وهم بنو عمرو بن عمير بن عوف الثقفي، كانوا يداينون بني المغيرة بن عبد الله بن عميرة بن مخزوم وكانوا يربون فلما ظهر النبي صلى الله عليه وسلم على الطائف أسلم هؤلاء الإِخوة فطلبوا رباهم من بني المغيرة، فقال بنو المغيرة: والله ما نعطي الربا في الإِسلام وقد وضعه الله تعالىٰ عن المؤمنين، فاختصموا إلى عتاب بن أسيد وكان عامل رسول الله صلى الله عليه وسلم على مكة فكتب عتاب بن أسيد إلى النبي صلى الله عليه وسلم بقصة الفريقين وكان ذلك مالا عظيماً فأنزل الله تعالىٰ: { يَٰأَيُّهَا ٱلَّذِينَ ءَامَنُواْ ٱتَّقُواْ ٱللَّهَ وَذَرُواْ مَا بَقِىَ مِنَ ٱلرِّبَوٰاْ }.

And Muqatil said: It was revealed concerning four brothers from Thaqif – Mas‘ud, ‘Abd Yalayl, Habib and Rabi‘ah – who were of Banu ‘Amr bin ‘Umayr bin ‘Awf al-Thaqafi. They used to give loans to Banu al-Mughirah bin ‘Abd Allah bin Makhzum and take riba. When the Prophet attacked al-Ta`if these brothers surrendered and asked for their riba from Banu al-Mughirah. But Banu al-Mughirah said: By God, we will not give riba in Islam when God Most High has removed it from the believers. So they took their dispute to ‘Attab bin Usayd who was the Messenger’s official in Makkah. Then ‘Attab bin ‘Usayd wrote to the Prophet the case of the two parties and it involved a great amount. Then God revealed: O believers! Fear God and give up what remains of riba”.

This tradition expressly says that the verses about riba in Surah al-Baqarah, especially 2:278, were revealed at the time of attack on al-Ta`if, which took place in 8 AH. A similar tradition, without the mention of four brothers, is narrated by Ibn Mundah and Abu Ya‘la from Kalbi from Abu Salih from Ibn ‘Abbas. Ibn Jarir and Ibn Kathir also mention it, attributing it to Zayd bin Aslam, Ibn Jurayj, and al-Suddi. Usmani quotes a similar tradition, but in reality commentators have mentioned other contradictory traditions about the background of the verses. Thus Baghawi mentions the following:

Regarding the word of God: “O believers! Fear God and forego what remains of riba”, ‘Ata and ‘Ikrimah said that it was revealed concerning al-‘Abbas ibn ‘Abd al-Muttalib and ‘Uthman bin ‘Affan who bought some dates (not yet harvested). When the time came for harvesting, the owner of the dates said to them: If the two of you took what is owed to you, I would not have enough for my children. So would you take half and delay the delivery of the remaining half and I double it for you? So they acted accordingly and when the agreed time came they asked for the increased amount. This reached the Messenger of God and he prohibited it to them. Then God Most High sent down this ayah. So they heard and obeyed and took only the capital amount.

If the prohibition of riba in 3:130 was revealed around 2 AH and ‘Abbas converted to Islam shortly before the conquest of Makkah in 8 AH, then it is unlikely that ‘Uthman would be taking riba along with ‘Abbas. Perhaps the original tradition mentioned Khalid bin Walid, as in the tradition below and not ‘Uthman. Khalid accepted Islam sometimes after the treaty of Hudaybiyah in 6 AH.

وقال السدي: نزلت في العباس وخالد بن الوليد وكانا شريكين في الجاهلية يسلفان في الربا إلى بني عمرو بن عمير، ناس من ثقيف، فجاء الإِسلام ولهما أموال عظيمة في الربا فأنزل تعالىٰ هذه الآية فقال النبي صلى الله عليه وسلم في حجة الوداع في خطبته يوم عرفة: " ألا كل شيء من أمر الجاهلية تحت قدمي موضوع، ودماء الجاهلية موضوعة وإن أول دم أضع من دمائنا دم ابن ربيعة بن الحارث، كان مسترضعاً في بني سعد فقتلته هذيل، وربا الجاهلية موضوعة كلها، وأول ربا أضع ربا العباس بن عبد المطلب فإنها موضوعة كلها ".

And Suddi said that it [2:278] was revealed concerning al-‘Abbas and Khalid bin Walid. The two were partners in the time of Jahiliyyah, dealing with Banu ‘Amr bin ‘Umayr (a sub-tribe) of Banu Thaqif. When Islam came they had a great amount due in riba. Then this ayah was revealed. The Prophet in his khutbah on the day of ‘Arafah during his farewell hajj said: Beware! Everything from the Jahiliyyah has come under my feet nullified. The blood (claims) of Jahiliyyah are nullified and the first of our blood claims that I nullify is that of Ibn Rabi‘ah bin al-Harith. He was a foster-child among Banu Sa‘d when Hudhayl killed him. And riba of Jahiliyyah is nullified, all of it. The first riba I nullify is that of al-‘Abbas ibn al-Muttalib which is nullified all of it.

The above tradition expressly connects the revelation of the verse 2:278 with the riba accumulated by al-‘Abbas. But the accounts reported from Jabir bin ‘Abd Allah of the khutbah during the farewell hajj (Muslim 2137 etc) while referring to the riba of al-‘Abbas do not say that the Qur`anic verses were revealed about it.

If the riba due to al-‘Abbas was the first riba to be cancelled in Islam and this cancellation took place during the farewell khutbah, then 2:278 and other verses connected with it were revealed very close to the Prophet’s farewell hajj. But the words “first riba” may be interpreted in relation to the day of the farewell khutbah, that is, they may be interpreted to mean: “everyone should cancel today all riba due to him and I begin the process by cancelling the riba due to al-‘Abbas”.

The Qur`an also provides a clue to the dating of the verses 2:275-280. The very strong language of 2:275-280 is suitable for the situation between the conquest of Makkah and the farewell hajj when a large number of people in Arabia entered Islam and Islam became the leading power in the land. At this point total destruction of a system based on exploitation and its complete replacement by a system based on justice and compassion was necessary to extend the Muslim brotherhood, first to whole of Arabia and then to the world at large. The verses 2:275-280 achieve that.

In view of the above discussion it is fairly certain that 30:39 is the earliest passage referring to riba in the Qur`an while 2:275-280 is the last. The order of 4:161 and 3:130 is uncertain.

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[1] Sahih Muslim bi Sharh al-Nawawi, published by Dar Abi Hayan, 1415 H/1995 C.E.

[2] Imam al-Ghazali has explained the same as follows:

"The creation of dirhams and dinars (money) is one of the blessings of Allah…. They are stones having no intrinsic usufruct or utility, but all human beings need them, because every body needs a large number of commodities for his eating, wearing etc, and often he does not have what he needs and does have what he needs not.. Therefore, the transactions of exchange are inevitable. But there must be a measure on the basis of which price can be determined, because the exchanged commodities are neither of the same type, nor of the same measure which can determine how much quantity of one commodity is a just price for another. Therefore, all these commodities need a mediator to judge their exact value…. Allah Almighty has, therefore, created dirhams and dinars (money) as judges and mediators between all commodities so that all objects of wealth are measured through them… and their being the measure of the value of all commodities is based on the fact that they are not an objective in themselves. Had they been an objective in themselves, one could have a specific purpose for keeping them which might have given them more importance according to his intention while the one who had no such purpose would have not given them such importance and thus the whole system would have been disturbed. That is why Allah has created them, so that they may be circulated between hands and act as a fair judge between different commodities and work as a medium to acquire other things…. So, the one who owns them is as he owns every thing, unlike the one who owns a cloth, because he owns only a cloth, therefore, if he needs food, the owner of the food may not be interested in exchanging his food for cloth, because he may need an animal for example. Therefore, there was needed a thing which in its appearance is nothing, but in its essence is everything. The thing which has no particular form may have different forms in relation to other things like a mirror which has no color, but it reflects every color. The same is the case of money. It is not an objective in itself, but it is an instrument to lead to all objectives… (Usmani 140)

[3] For example, as we shall see later in this book the agreement of the scholars on the validity of the concept of riba al-fadl is an error. Likewise, there is overwhelming evidence that almost complete consensus among scholars of all background on the stoning penalty for adultery is an error (A. Shafaat, Punishment of Adultery in Islam: A Detailed Examination, www.islamicperspectives.com). Similarly, it is fairly clearly that the agreement among the scholars from the four schools that there is no zakah on diamond is in error (www.islamicperspectives.com).

[4] Gelpi, Rosa-Maria and Julien-Labruyoure, Francois, The History of Consumer Credit: Doctrines and Practices [Translated from French into English by Mn Liam Gavin], 2000, p.25.

[5] See Mohammad Hashim Kamali, Principles Of Islamic Jurisprudence (1991) 207-208. Abu Zahrah, Usul Al-Fiqh 197-211 (1950), 188. References from: ‘Umar F. Mogul, “Approximating Certainty in Ratiocination: How To Ascertain the ‘Illah (Effective Cause) in the Islamic Legal System and How to Determine the Ratio Decidendi in the Anglo-American Common Law”, The Journal of Islamic Law125 (Fall/ Winter 1999), 16-17.

[6] For almost all people, fasting involves some hardship whether or not we are travelling or sick. And many other teachings of Islam involve even greater hardship, e.g. armed jihad with one’s life and wealth. The Qur`an, however, does not consider these as hardships while it considers fasting when one is ill or travelling to be a hardship. The reason is that the Shari ‘ah of the Qur`an leads to such ease in the future, often in this life and certainly in the hereafter, that anyone who believes in that ease will not consider those laws as involving hardship. Only when the same ease in the future can be achieved through an easier way does a particular way can become ‘usr (hardship). Thus the future benefits are not affected if fasting is done in a month other than Ramadan if it becomes harder than normal in Ramadan. But future benefits for the ummah in this world and for the individual believers in the hereafter get greatly affected if jihad is not done when its time comes. Hence no amount of sacrifice in jihad is hardship.

[7] In 71:25 ma is used for emphasis on the cause for drowning or for magnification of that cause (sins). Thus the sense is either that “only because of their sins they were drowned” or “because their sin were very great, they were drowned”.

[8] For a more thorough discussion of alleged variants in the Qur`an, see Ahmad Shafaat, Preservation of the Revelations Received by the Prophets Muhammad and Jesus, www.islamicperspectives.com.

[9] Bukhari 3/298=1943 reads:

Musa bin Isma‘il related to us: Jarir bin Hazim related to us: Abu Raja` related to us from Samurah bin Jundub who said:

The Prophet said: This night I dreamt that two men came and took me to a holy land whence we proceeded on till we reached a river of blood, where a man was standing, and on its bank was standing another man with stones in his hands. The man in the river tried to come out, but the other threw a stone in his mouth and forced him to go back to his original place. So, whenever he tried to come out, the other man would throw a stone in his mouth and force him to go back to his former place. I asked, 'Who is this?' I was told, 'The person in the river was a riba-eater."

This abbreviated narration does not make it clear that the vision took place during the Prophet’s mi‘raj but reference to mi‘raj is explicit in a longer account found in Bukhari 2/468 = 1297, 9/171 and Ahmad 19242. In Bukhari 9/171 one of the narrators is not sure whether the river was a river of blood. Ahmad 19242 also gives a narration in which the reference to blood is not found.

[10] This is not the case for all revelations, since in some revelations certain good things could be prohibited as a form of punishment for a tendency to transgress.