Riba, commonly understood as interest or usury, is strictly prohibited in Islam. This prohibition is explicitly stated in the Quran and reinforced by the Sunnah (teachings and practices of Prophet Muhammad). The fundamental reason for its prohibition is to prevent exploitation, especially of the needy, and to foster justice in financial dealings. Riba is categorized into two main types: Riba al-Fadl (riba of excess) and Riba an-Nasi'ah (riba of delay), both of which involve illicit gains in specific transactions. Islamic jurisprudence outlines detailed rulings to ensure that financial transactions adhere to these principles, emphasizing equality in exchange and immediate possession for certain types of goods to avoid any form of riba .
Scholarly Analysis
Introduction to Riba and its Prohibition
Riba, in the Arabic language, signifies an increase or excess. This linguistic meaning is reflected in the Quran, where it is used to describe the growth of vegetation after rain or an increase in number, as in the verse: "{So when We send down upon it water, it quivers and swells}" . In Islamic jurisprudence, Riba refers to a specific type of increase in particular transactions or a delay in payment in others. It is unequivocally prohibited in Islam, a ruling established by the Quran, the Sunnah, and the consensus of Muslim scholars (Ijma'). This prohibition is considered a major sin (Kabirah), with severe warnings against those who engage in it .
The Quran explicitly condemns riba, stating: "{Allah has permitted trade and has forbidden interest}" . Further verses emphasize the gravity of this prohibition, warning those who consume riba that they will rise on the Day of Judgment "like one whom Satan has afflicted with madness" . The Quran also declares war from Allah and His Messenger against those who do not abandon what remains of riba, while assuring those who repent that they will have their principal capital without either wronging or being wronged . The prohibition of riba was revealed in the 8th or 9th year of Hijra .
The Sunnah further solidifies this prohibition. The Prophet Muhammad (peace be upon him) cursed the one who consumes riba, the one who feeds it, its two witnesses, and its scribe, stating that "they are all equal" . He also listed consuming riba among the seven destructive sins (al-Mubiqat) . The consensus of the Muslim nation on the prohibition of riba is so strong that some scholars have stated it was never permitted in any divine law . Anyone living in a Muslim environment who denies its prohibition is considered an apostate, as it is among the clear and universally agreed-upon prohibitions .
The underlying reasons for the prohibition of riba include preventing the exploitation of the poor and needy, avoiding the multiplication of debt, and mitigating animosity and hatred that can arise from such dealings. It also discourages idleness and reliance on unearned income, promoting instead active participation in economic endeavors .
Types of Riba
Islamic jurisprudence divides riba into two primary categories: Riba al-Fadl (riba of excess) and Riba an-Nasi'ah (riba of delay) . Some scholars also mention a third type, Riba al-Yad (riba of hand), which is related to the delay in actual possession .
Riba al-Fadl (Riba of Excess)
Riba al-Fadl refers to an excess or increase in one of the two exchanged items when trading a specific type of ribawi (riba-prone) commodity for another of the same type. For example, selling two measures of wheat for three measures of wheat, or 100 grams of gold for 110 grams of gold, is prohibited . This type of riba is explicitly forbidden in the Sunnah to prevent people from resorting to Riba an-Nasi'ah by selling gold for a deferred payment and then receiving silver with an excess amount .
The prohibition of Riba al-Fadl emphasizes the necessity of equality in quantity when exchanging items of the same genus that are subject to riba. The quality or craftsmanship of the items does not justify an increase. For instance, selling good quality wheat for a larger quantity of poor quality wheat is forbidden, as is selling new gold jewelry for a larger weight of old gold, due to the craftsmanship involved . The correct approach in such cases is to sell the old item for its value and then use that value to purchase the new item .
Riba an-Nasi'ah (Riba of Delay)
Riba an-Nasi'ah, derived from nasa' (delay), involves a delay in the exchange of two ribawi commodities. This type of riba occurs when two items that fall under the category of ribawi goods are exchanged with a delay in the delivery of one or both items, regardless of whether they are of the same genus or different genera, and whether they are equal or unequal in quantity .
There are two main forms of Riba an-Nasi'ah:
- Delay in debt payment with an increase: This was the primary form of riba in pre-Islamic times (Riba al-Jahiliyyah). If a debt was due and the debtor could not pay, the creditor would offer an extension in exchange for an increase in the debt amount, leading to a multiplication of the debt . This is the type of riba explicitly prohibited by the Quran .
- Delay in possession in exchange of ribawi items: This occurs when two ribawi items, even if of different genera but sharing the same underlying cause for riba, are exchanged without immediate mutual possession in the same session of the contract. For example, selling gold for silver with a delay in possession, or selling a measure of wheat for a measure of barley with delayed delivery . The Prophet Muhammad (peace be upon him) stated, "If these types differ, then sell as you wish, if it is hand to hand" . This emphasizes the requirement of immediate exchange (Yadan bi Yad) to avoid riba an-nasi'ah.
Riba al-Qard (Interest on Loans)
Riba al-Qard refers to any stipulated or customary increase on a loan amount, such as a monthly or annual interest rate, as is common in dealings with conventional banks or some merchants. This is strictly prohibited based on the Quranic verses that permit trade and forbid riba, and the verse stating, "{And if you repent, you will have your principal - [thus] you do no wrong, nor are you wronged}" . This means that only the principal amount of the loan should be returned, without any increase or decrease .
Ribawi Items and Their Underlying Causes (Illah)
The Prophet Muhammad (peace be upon him) explicitly identified six items in which riba applies: gold, silver, wheat, barley, dates, and salt. He stated: "Gold for gold, like for like, and silver for silver, like for like, and wheat for wheat, like for like, and barley for barley, like for like, and dates for dates, like for like, and salt for salt, like for like. Whoever gives more or takes more has engaged in riba. But sell gold for silver as you wish, hand to hand, and sell wheat for dates as you wish, hand to hand, and sell barley for dates as you wish, hand to hand" . These six items are universally agreed upon as ribawi .
Scholars have differed on the underlying cause (Illah) that makes these items ribawi, which in turn determines whether other items can be analogically extended (Qiyas) to them.
Different Scholarly Views on the Illah of Riba
There are several prominent views among scholars regarding the Illah of riba:
- Kail (measurement by volume) and Wazn (measurement by weight) with genus: This is the most famous opinion within the Hanbali school. According to this view, the Illah for gold and silver is weight and genus, while for wheat, barley, dates, and salt, it is volume and genus. Therefore, riba applies to any item that is customarily measured by volume or weight and belongs to the same genus . This implies that items like cotton or linen fabrics, which are not typically weighed or measured by volume, are not subject to riba .
- Thaman (currency) for gold and silver, and Ta'm (edibility) for other items with genus: This is the well-known view of the Shafi'i school. Here, gold and silver are considered ribawi due to their monetary value, while the other four items are ribawi because they are edible staples. Thus, riba would apply to all edible items, even if not measured by volume or weight, such as watermelons or pomegranates .
- Kail or Wazn with Ta'm (edibility) and genus: This view combines the previous two, stating that riba applies only to items that are both edible and measured by volume or weight. This is the preferred view of Shaykh al-Islam Ibn Taymiyyah . According to this, items like iron or soapwort (ushnan) would not be ribawi if they are not edible, even if weighed or measured by volume . Salt is considered ribawi because it is essential for food, thus falling under the category of edibles .
- Literal adherence to the six items (Zahiri school): The Zahiri school, which rejects analogical reasoning (Qiyas), restricts riba solely to the six items explicitly mentioned in the Hadith. They argue that if riba were to apply to all measured or weighed items, the Prophet would have stated it in a more general and concise manner .
The most accurate view, as argued by some scholars, is that the Illah for gold and silver is their nature as gold and silver, regardless of whether they are used as currency or in other forms like jewelry. For the other four items, the Illah is their being both measured by volume and edible. This approach limits the scope of riba to what is clearly established, upholding the principle that all transactions are permissible unless explicitly prohibited .
Defining "Genus" in Ribawi Items
Scholars have established rules to determine what constitutes a single genus for ribawi items:
- Agreement in specific name from original creation: If two items share the same specific name from their original creation, they are considered one genus. For example, all types of dates are one genus, and all types of wheat are one genus .
- Difference in specific name from original creation: If two items differ in their specific name from their original creation, they are considered different genera. For example, wheat and barley are different genera .
- Processed forms: Processed forms of a single genus, such as wheat and its flour, are considered the same genus. Similarly, fresh and dried forms of a fruit (e.g., grapes and raisins, fresh dates and dried dates) are considered one genus .
- Animal products: Meats from different types of animals are generally considered different genera (e.g., lamb and goat are one genus, beef and buffalo are one genus, camel meat is a separate genus). Similarly, different types of milk and eggs are distinct genera based on their origin . However, there are differing opinions on whether all meats are one genus or multiple genera .
- Parts of an animal: Meat, fat, tail fat, liver, spleen, and stomach are considered different genera due to their distinct names and forms .
Rulings on Specific Financial Transactions
The prohibition of riba leads to specific rulings on various financial transactions:
Exchange of Ribawi Items
- Same genus, same Illah: When exchanging two items of the same genus that share the same Illah (e.g., wheat for wheat, gold for gold), two conditions must be met:
- Equality in quantity: The exchange must be like for like, without any excess .
- Immediate possession: Both items must be exchanged hand-to-hand in the same session of the contract, without any delay .
- This includes cases where one item is raw and the other is processed (e.g., grain for flour), or fresh for dried (e.g., fresh dates for dried dates), or pure for mixed, as these involve an unknown disparity in quantity or quality that leads to riba .
- Different genus, same Illah: When exchanging two items of different genera but sharing the same Illah (e.g., gold for silver, wheat for barley), immediate possession is required, but an excess is permissible .
- Different genus, different Illah: When exchanging two items of different genera that do not share the same Illah (e.g., food for silver, or food for gold), both excess and delay are permissible .
- Non-ribawi items: For items that are not ribawi (e.g., clothes, animals), both excess and delay are permissible. For example, selling one camel for two camels, or one garment for two garments, is allowed . However, there is a difference of opinion regarding the permissibility of delay in the exchange of animals of the same genus .
Specific Prohibited Sales
- Muhaqalah: Selling grain in its ear for grain of the same genus .
- Muzabanah: Selling fresh dates on the palm for dried dates, except for Araya transactions under specific conditions .
- Araya: This is an exception to Muzabanah, allowing the sale of fresh dates on the palm for an estimated equivalent amount of dried dates, up to five awsuq (a measure), for a person in need of fresh dates who does not have cash. This transaction has five conditions: it must be less than five awsuq, the buyer must need fresh dates, the buyer must not have cash, the sale must be based on estimation, and both parties must take possession before parting .
- Sale of mixed items: Selling an item mixed with something else (e.g., dates with stones) for a pure item or another mixed item, unless the mixture is negligible and unavoidable .
- Sale of debt for debt (Kāli' bi Kāli'): This is prohibited, as it involves exchanging a debt for another debt .
Currency Exchange (Sarfa)
Currency exchange, or Sarfa, involves exchanging monetary values (gold for silver, or one currency for another). The primary condition for its validity is immediate mutual possession in the same session of the contract. If the parties separate before possession, the contract is void. This is based on the Prophet's saying: "Gold for silver is riba unless it is hand to hand" .
Riba in Non-Muslim Lands
The general prohibition of riba applies universally, whether in Muslim lands or non-Muslim lands, because its prohibition is absolute and unrestricted . However, some early scholars, like Abu Hanifa and Muhammad, held that it is permissible to take money from a belligerent non-Muslim in a land of war through any means that does not involve treachery, even through invalid contracts like riba, because their property is considered permissible. This view, however, has been misinterpreted by some Muslims to justify taking interest from banks in non-Muslim countries. This interpretation is deemed incorrect and unlawful because the original ruling pertained to the property of belligerent non-Muslims, not to the deposits of Muslims in foreign banks, which can strengthen non-Muslim economies against Muslims. Therefore, depositing money in non-Muslim countries is generally impermissible unless there is an extreme necessity or for import/export purposes. Any interest earned from such deposits is considered unlawful and should be spent on public welfare in Muslim lands .
Conclusion
Riba is a grave prohibition in Islam, rooted in divine texts and scholarly consensus, aimed at ensuring justice and preventing exploitation in financial dealings. It encompasses both Riba al-Fadl (excess in exchange of ribawi items of the same genus) and Riba an-Nasi'ah (delay in exchange or payment of ribawi items or loans). The specific items subject to riba are gold, silver, wheat, barley, dates, and salt, with scholarly debate on the precise underlying causes that extend this ruling to other commodities. Adherence to the principles of equality in quantity and immediate possession for ribawi items, as well as the absolute prohibition of interest on loans, forms the cornerstone of Islamic financial ethics. The prohibition of riba is universal, and any attempts to circumvent it through misinterpretations of classical rulings are considered invalid.
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