RIBA & Its Classification

Outline
Riba – Literal Meaning
Riba – Etymology and Synonyms
Riba According to Islamic Law
Riba – Prohibition in the Bible
Difference b/w Qarz, Dayn, Ariyah & Ijarah
Riba - Prohibition in the Holy Quran
Riba - Prohibition in Ahadith
Riba-ul-Quran
Riba-ul-Hadith
Synonyms of Riba-u-Quran & Riba-ul-Hadith
Case Study on Riba
Difference b/w Commodity & Currency
 Riba – Lexicon Meaning

Literal Meaning: Increase

Technical Meaning: Increase on loans

 Riba – Etymology & Synonyms

• Riba is an Arabic word

• Sud is a Persian word for Riba
• Interest is also an English word for Riba
• Usury is an English word for Riba
• There is no noteworthy difference in Riba, Sud,
Usury & Interest
• Sometimes, word ‘interest’ is used in context of
commercial loans while word ‘usury’ is used for
personal loans
 Riba Accroding to Islamic Law

Every loan that derives benefit (to the creditor) is Riba

(Syuti Jami’us Saghir V 2, pg 94)

 Different Forms of Dealings
Qard (Loan): To give currency or specific commodity to other for
a period of time without intention of receiving any worldly benefit
in return. Qarz falls in the category of Akhlaq

Dayn (Debt): Amount to be paid by buyer to the seller against

purchased commodity/use of commodity without any addition in
respect of time. This is a form of Qarz.

Aariyah (Lending and Borrowing): To give any commodity for

its use to other without intention of taking any worldly return on
it. Aariyah falls in the category of Akhlaq

Ijarah (Rent): To give any commodity to other and take returns

for its use. Ijarah falls in the category of Mu’amlat
 Riba – Prohibition in the Bible
Exo 22:25 If thou lend money to any of my people that is poor
by thee, thou shalt not be to him as an usurer, neither shalt thou
lay upon him usury.

Lev 25:36 Take thou no usury of him, or increase: but fear thy
God; that thy brother may live with thee.

Lev 25:37 Thou shalt not give him thy money upon usury, nor
lend him thy victuals for increase.

Deu 23:19 Thou shalt not lend upon usury to thy brother; usury
of money, usury of victuals, usury of any thing that is lent upon
usury.

Deu 23:20 Unto a stranger thou may lend upon usury; but unto
thy brother thou shalt not lend upon usury…
 Riba – Prohibition in the Bible
Neh 5:7-10 Then I consulted with myself, and I rebuked the
nobles, and the rulers, and said unto them, Ye exact usury, every
one of his brother. And I set a great assembly against them. … I
likewise, and my brethren, and my servants, might exact of them
money and corn: I pray you, let us leave off this usury.

Psa 15:1-4 LORD, who shall abide in thy tabernacle? who shall
dwell in thy holy hill?... He that putteth not out his money to
usury, nor taketh reward against the innocent. He that doeth
these things shall never be moved.

Pro 28:8 He that by usury and unjust gain increaseth his

substance, he shall gather it for him that will pity the poor.

Eze 18:8 He that hath not given forth upon usury, neither hath
taken any increase, that hath withdrawn his hand from iniquity,
hath executed true judgment between man and man

Eze 18:13 Hath given forth upon usury, and hath taken increase:
shall he then live? he shall not live: he hath done all these
abominations; he shall surely die; his blood shall be upon him.
 Riba – Prohbition in the Holy Quran
ً ‫َوَأْخ ِذِه ُم الِّرَبا َو َقْد ُنُه وْا َعْنُه َوَأْك ِلِه ْم َأْم َو اَل الَّناِس ِبالَباِط ِل َوَأْع َتْدَنا ِللَك اِفِريَن ِم ْنُه ْم َعَذ ابًا َأِل‬
‫يما‬
“That they [Jews] took riba, though they were forbidden and that they
devoured men’s substance wrongfully – We have prepared for those among
men who reject faith a grievous punishment.” (Quran 4:161)

‫اَّلِذ يَن َيْأُك ُلوَن الِّرَبا َال َيُقوُموَن ِإَّال َك َم ا َيُقوُم اَّلِذ ي َيَتَخ َّبُطُه الَّش ْيَطاُن ِم َن الَم ِّس َذِلَك ِبَأَّنُه ْم َقاُلوْا‬
‫ِإَّنَم ا الَبْيُع ِم ْثُل الِّرَبا َوَأَح َّل الّلُه الَبْيَع َوَح َّرَم الِّرَبا َفَم ن َج اءُه َمْو ِع َظٌة ِّمن َّرِّبِه َفانَتَه َى َفَلُه َما َس َلَف‬
‫َوَأْم ُرُه ِإَلى الّلِه َو َمْن َعاَد َفُأْو َلـِئَك َأْص َح اُب الَّناِر ُه ْم ِفيَه ا َخ اِلُد وَن‬
“Those who charge riba are in the same position as those controlled by the
devil's influence. This is because they claim that riba is the same as trade.
However, Allah permits trade, and prohibits riba. Thus, whoever heeds this
commandment from his Lord, and refrains from riba, he may keep his past
earnings, and his judgment rests with Allah. As for those who persist in riba,
they incur Hell, wherein they abide forever.” (Quran 2:275)
 Riba – Prohibition in the Holy Quran
. ‫َيْمَح ُق الّلُه الِّرَبا َو ُيْر ِبي الَّصَد َقاِت َوالّلُه َال ُيِح ُّب ُك َّل َك َّف اٍر َأِثيٍم‬
. ‫ِإَّن اَّلِذ يَن آَمُنوْا َو َعِم ُلوْا الَّصاِلَح اِت َوَأَقاُموْا الَّصَالَة َوآَتُوْا الَّزَك اَة َلُه ْم َأْج ُرُه ْم ِع نَد َرِّبِه ْم َوَال َخ ْو ٌف َعَلْيِه ْم َوَال ُه ْم َيْحَزُنوَن‬
. ‫َيا َأُّيَه ا اَّلِذ يَن آَمُنوْا اَّتُقوْا الّلَه َو َذُروْا َما َبِق َي ِم َن الِّرَبا ِإن ُك نُتم ُّمْؤ ِم ِنيَن‬
. ‫َفِإ ن َّلْم َتْف َعُلوْا َفْأَذُنوْا ِبَح ْر ٍب ِّمَن الّلِه َوَرُس وِلِه َو ِإن ُتْبُتْم َفَلُك ْم ُرُؤوُس َأْم َو اِلُك ْم َال َتْظِلُم وَن َوَال ُتْظَلُم وَن‬
. ‫َو ِإن َك اَن ُذو ُعْس َرٍة َفَنِظ َرٌة ِإَلى َمْيَسَرٍة َوَأن َتَص َّد ُقوْا َخ ْيٌر َّلُك ْم ِإن ُك نُتْم َتْع َلُم وَن‬
“Allah condemns riba, and blesses charities. Allah dislikes every disbeliever,
guilty. Indeed! those who believe and do good works and establish worship
and pay the poor-due, their reward is with their Lord and there shall no fear
come upon them neither shall they grieve. O you who believe, you shall
observe Allah and refrain from riba, if you are believers. If you do not, then
expect a war from Allah and His Messenger. But if you repent, you may keep
your capitals, without inflicting injustice, or incurring injustice. If the debtor
is unable to pay, wait for a better time. If you give up the loan as a charity, it
would be better for you, if you only knew.” (Quran 2: 276-280)
 Riba – Prohibition in the Holy Quran

‫َيا َأُّيَه ا اَّلِذ يَن آَمُنوْا َال َتْأُك ُلوْا الِّرَبا َأْض َعافًا ُّمَض اَعَفًة َواَّتُقوْا الّلَه َلَعَّلُك ْم ُتْف ِلُح وَن‬
“O you who believe, you shall not take riba, compounded over and over.
Observe Allah, that you may succeed.” (Quran 3:130)

‫و‬ ‫ي‬‫ِر‬ ‫ٍة‬‫ا‬ ‫ن‬ ‫م‬ ‫آ‬ ‫ا‬ ‫ِه‬‫َّل‬‫ل‬‫ا‬ ‫ن‬ ‫ِع‬ ‫و‬ ‫ِس‬ ‫َّنا‬‫ل‬‫ا‬ ‫ِل‬ ‫ا‬ ‫َأ‬ ‫ي‬‫ِف‬ ‫ِّل‬
‫َن‬
‫ُد َوْج َه‬ ‫ُت‬ ‫َز‬
‫َك‬ ‫ِّم‬ ‫َيْرُب َد َو َم َتْيُت‬ ‫َال‬‫َف‬ ‫َو‬ ‫ْم‬ ‫َو َما آَتْيُتم ِّمن ِّربًا َو‬
‫ُب‬ ‫َي‬
‫ْر‬
‫الَّلِه َفُأْو َلِئَك ُه ُم الُم ْض ِعُفوَن‬
“The riba that is practiced to increase some people's wealth, does not gain
anything at Allah. But if people give to charity, seeking Allah’s pleasure,
these are the ones who receive their reward many fold.” (Quran 30:39)
 Riba – Prohibition in Ahadith

“Jabir said that Muhammad (s.a.w) cursed the accepter

of usury and its payer, and one who records it, and the
two witnesses, and he said: They are all equal.”
[Sahih Muslim, Book 10, Number 3881]
 Riba-ul-Quran
(Increase in Return on Loan)

. ‫َيا َأُّيَه ا اَّلِذ يَن آَمُنوْا اَّتُقوْا الّلَه َو َذُروْا َما َبِق َي ِم َن الِّرَبا ِإن ُك نُتم ُّمْؤ ِم ِنيَن‬
. ‫َفِإ ن َّلْم َتْف َعُلوْا َفْأَذُنوْا ِبَح ْر ٍب ِّمَن الّلِه َوَرُس وِلِه َو ِإن ُتْبُتْم َفَلُك ْم ُرُؤوُس َأْم َو اِلُك ْم َال َتْظِلُم وَن َوَال ُتْظَلُم وَن‬

O you who believe, you shall observe Allah and refrain from all
kinds of riba, if you are believers. If you do not, then expect a war
from Allah and His Messenger. (Quran 2:277-279)
 Riba-ul-Hadith
(Increase in Exchange of Specific Commodity)

“We used to do barter of two Sas of mixed dates for one Sa (of
good dates). The Prophet instructed us: It is not permissible to
barter two Sas of dates for one Sa nor two Dirhams for one
Dirham (as this is a kind of usury).”
[Sahih Bukhari, Volume 3, Book 034, Number 294]
 Riba-ul-Hadith
(Increase in Exchange of Specific Commodity)

• “Gold for gold,

• silver for silver,
• wheat for wheat,
• barley for barley,
• date for date,
• salt for salt,
must be equal on both sides and hand to hand;
whoever pays more or demands more indulges in Riba.”
[Sahih Muslim: Book 10: Hadith 3854.The Book of Transactions]
 Riba-ul-Hadith
(Increase in Exchange of Specific Commodity)

Ibne 'Umar (r.a) narrates:

• The selling of wheat for wheat is Riba except if it is
hand to hand and equal in amount.
• Similarly, the selling of barley for barley is Riba except
if it is hand to hand and equal in amount, and
• dates for dates is Riba except if it is hand to hand and
equal in amount.
[Sahih Bukhari, Volume 3, Book 34, Number 379]
 Case Study on Riba

‫و‬ ‫ِل‬ ‫ُك‬‫َّل‬ ‫َل‬ ‫ّل‬ ‫ال‬ ‫و‬ ‫ا‬ ‫ا‬ ‫ُّم‬ ‫اف‬ ‫َأ‬ ‫ا‬ ‫ل‬ ‫ا‬ ‫و‬‫ُل‬ ‫ْأ‬ ‫و‬ ‫آ‬ ‫ي‬ ‫ِذ‬
‫َيا َأُّيَه ا اَّل َن َم ُن ْا َال َت ُك ْا ِّرَب ْض َع ًا َض َعَفًة َو َّتُق ْا َه َع ْم ُتْف ُح َن‬
“O you who believe, you shall not take riba, compounded over
and above. Observe Allah, that you may succeed.” (Quran 3:130
)

‫ُك‬‫ِل‬ ‫ا‬ ‫َأ‬ ‫و‬ ‫ُك‬‫َل‬ ‫ن‬ ‫ِإ‬ ‫ِه‬‫ِل‬

‫و‬ ‫ِه‬
‫َفِإن ْمَّل َتْف َعُلوْا َفْأَذُنوْا َحِبْرٍب ِّم َن الّل َوَرُس َو ُتْبُتْم َف ْم ُرُؤ ُس ْم َو ْم َال‬
‫و‬ ‫و‬ ‫ِل‬
‫َتْظ ُم َن َوَال ُت ُم َن‬
‫َل‬‫ْظ‬
If you do not, then expect a war from Allah and His Messenger.
But if you repent, you may keep your capitals, without inflicting
injustice, or incurring injustice (neither you do injustice nor
injustice is done with you).
(Quran 2:279)
 Case Study on Riba

Q: It seems that basic Reason (ilat) of Prohibition of riba is

‘Injustice’ as obvious from the quoted Ayat; then how riba can
be held Haram on Commercial Interests when it is evident that
there is no injustice to either party; particularly when both
parties are whole-heartedly agreeing to this Transaction?
 Case Study on Riba

Ans: Injustice is not a Illat [Basic Reason] of the prohibition of Riba; rather it is
a Hikmat [wisdom or consiquences].
Illat is an excess return to the Principal Amount on extended loan.
Islamic Law for prohibition of Riba does not depend on mutual agreement.
Can bribe or Fornication be allowed if these are committed with mutual consent?
Commercial Interest (riba) is detrimental not for the parties but also for public and
society due to the fact that excess amount to be paid in form of riba is added to
the cost of Production hence, it is in fact paid by customer not by borrower.
Since, this transaction not only affect borrower but also harm those customer who
avoid riba-based transaction; it is treated Haram more strictly.
 Differences b/w Commodity & Currency
Currency Commodity
 Same characteristics  Various Characteristics
 No intrinsic utility  Intrinsic utility
 Only a medium of Exchange  Various purposes & uses
 No different qualities  Different qualities
 Same units have same value  Same items have diff value

Conclusion Conclusion
 Can only be exchanged with  Can be sold or exchanged at
same units different units
 Any excess in case of exchange  Any excess in case of exchange
of currency or loan is for or sale is for its utility or
nothing quality
 Can not be treated as a  Can also be treated as a
Commodity [i.e., can not be Currency [i,e., item of
sold out] exchange like gold & wheat]
 Profit of Riba is Haram  Profit of trade is Halal
Questions

are

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