Jul 7, 2011

Posted by in Quran Reminders | 8 Comments

The Punishment for Dealing with Riba (Interest and Usury)

 

Those who eat Riba will not stand (on the Day of Resurrection) except like the standing of a person beaten by Shaytan leading him to insanity. That is because they say: “Trading is only like Riba,” whereas Allah has permitted trading and forbidden Riba. So whosoever receives an admonition from his Lord and stops eating Riba, shall not be punished for the past; his case is for Allah (to judge); but whoever returns (to Riba), such are the dwellers of the Fire ـ they will Abide therein. (2:275)

Tafsir (Ibn Kathir)

The Punishment for Dealing with Riba (Interest and Usury)

After Allah mentioned the righteous believers who give charity, pay Zakah and spend on their relatives and families at various times and conditions, He then mentioned those who deal in usury and illegally acquire people’s money, using various evil methods and wicked ways. Allah describes the condition of these people when they are resurrected from their graves and brought back to life on the Day of Resurrection:

(Those who eat Riba will not stand (on the Day of Resurrection) except like the standing of a person beaten by Shaytan leading him to insanity)

This Ayah means, on the Day of Resurrection, these people will get up from their graves just as the person afflicted by insanity or possesed by a demon would. Ibn `Abbas said, “On the Day of Resurrection, those who consume Riba will be resurrected while insane and suffering from seizures.””

Al-Bukhari recorded in the long Hadith about the dream that the Prophet had “We reached a river -the narrator said, “I thought he said that the river was as red as blood”- and found that a man was swimming in the river, and on its bank there was another man standing with a large collection of stones next to him. The man in the river would swim, then come to the man who had collected the stones and open his mouth, and the other man would throw a stone in his mouth.” The explanation of this dream was that the person in the river was one who consumed Riba.

Allah’s statement,

(That is because they say: “Trading is only like Riba,” whereas Allah has permitted trading and forbidden Riba) indicates that the disbelievers claimed that Riba was allowed due to the fact that they rejected Allah’s commandments, not that they equated Riba with regular trade. The disbelievers did not recognize that Allah allowed trade in the Qur’an, for if they did, they would have said, “Riba is trade.” Rather, they said,

(Trading is only like Riba) meaning, they are similar, so why did Allah allow this, but did not allow that, they asked in defiance of Allah’s commandments.

Allah’s statement,

(Whereas Allah has permitted trading and forbidden Riba) might be a continuation of the answer to the disbelievers’ claim, who uttered it, although they knew that Allah decided that ruling on trade is different from that of Riba. Indeed, Allah is the Most Knowledgeable, Most Wise, Whose decision is never resisted. Allah is never asked about what He does, while they will be asked. He is knowledgeable of the true reality of all things and the benefits they carry. He knows what benefits His servants, so He allows it for them, and what harms them, so He forbids them from it. He is more merciful with them than the mother with her own infant.

Thereafter, Allah said,

(So whosoever receives an admonition from his Lord and stops eating Riba, shall not be punished for the past; his case is for Allah (to judge),) meaning, those who have knowledge that Allah made usury unlawful, and refrain from indulging in it as soon as they acquire this knowledge, then Allah will forgive their previous dealings in Riba,

(Allah has forgiven what is past.)

Sa`id bin Jubayr and As-Suddi said that,

(shall not be punished for the past) refers to the Riba one consumed before it was prohibited. Allah then said,

(But whoever returns) meaning, deals in Riba after gaining knowledge that Allah prohibited it, then that warrants punishment, and in this case, the proof will have been established against such person. This is why Allah said,

(such are the dwellers of the Fire ـ they will abide therein forever.)

`Ali and Ibn Mas`ud narrated that the Messenger of Allah said,

“May Allah curse whoever consumes Riba, whoever pays Riba, the two who are witnesses to it, and the scribe who records it.”

They say they only have witnesses and a scribe to write the Riba contract when they want it to appear to be a legitimate agreement, but it is still invalid because the ruling is applied to the agreement itself, not the form that it appears in. Verily, deeds are judged by their intentions.

  1. Assalamalikum, Can you please furnish us information as to why is Riba forbidden in Islam. In other words what adverse effects does interest have in the society.
    JazaqAllah

  2. walaiakum assalam..

    JazakAllahu Khairan for that suggestion. Insha Allah will try to find out a good article which talks about the harmful effects of Riba in our society

  3. Question:

    Why mark up (usury) is prohibited in Islam? Does interest has an effect on the national economy?
    Fatwa:

    All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad sallallaahu `alayhi wa sallam ( may Allaah exalt his mention ) is His slave and Messenger.

    Imaam ar-Raazi and other Muslim scholars may Allaah have mercy upon them state five reasons for forbidding Riba:

    First, in Riba transactions a person takes the money of another without compensation because the person who pays a Dirham in return for two Dirhams in cash or after a while gets an increase in his money without giving something for it. It is known that money is the key to getting what we need. So, it has to be protected. The Prophet (Sallallaahu Alaihi wa Sallam) said: "The inviolability of the money of the person is similar to the inviolability of his blood." So, taking his money without compensation is forbidden.

    Second, some scholars may Allaah have mercy upon them state that Allaah forbade Riba as it discourages people from working. In fact, when the money owner could get profit and interest through Riba transactions without having to work, he becomes lazy and prefers Riba to investing in trade and industry and this in turn leads to joblessness among the people. Indeed, the public interest is in trade, crafts, factories and buildings.

    Third, Riba causes severing relations among people as it takes the place of good loans which promote kindness and courtesy among people.

    Fourth, most of the time it is the rich person who gives the Riba loan to the poor person, hence putting yet another burden on the latter. So, encouraging Riba means giving more power to the rich over the poor who, in addition, will have to pay more than what he took and this is contradictory to mercy and benevolence and Allaah is the most Merciful, the most Benevolent.

    Fifth, Riba is forbidden by evidence from the texts of the Quran and Sunnah and we are not asked to know its wisdom. We are only required to approve that Riba is forbidden and act accordingly. In fact, a Muslim duty is to surrender to the Divine Instructions, to adhere to them and to do what is Halaal and to avoid what is Haraam, since Islam is based on total submission to Allaah, The Exalted, whether or not one knows the wisdom or reason behind the Divine Teachings.

    Allaah says (what means): {It is not for a believer, man or woman, when Allaah and His Messenger have decreed a matter that they should have any option in their decision. And whoever disobeys Allaah and His Messenger, he has indeed strayed in a plain error.} [Quran 33:36]

    The Prophet sallallaahu `alayhi wa sallam ( may Allaah exalt his mention ) said: “Allaah has cursed the one who consumes Riba (i.e. usury or interest), the one who gives it to others, the one who records it and the one who witnesses it.” [Muslim]

    As regards the effect of Riba (interest) on the national economy, it has dangerous effects and bad consequences on the economy. This is one of the reasons why Allaah forbade it. We will limit ourselves here to two disastrous effects of Riba on the national economies both in the consumption level and the production one.

    First, the Riba loans add to the exploitation of the poor and the needy as it results in more poverty, hence reducing their future earnings.

    On the other hand, these Riba loans make the rich creditors richer and add to their future earnings. It is known that the poor and needy classes constitute a big majority of the society. And, in case the income of this category of people decreases then their demand on the consumed and invested commodities decreases as well. So, if we know that this demand is actually the magic key that turns the wheel of the national economy, as a whole, we realize how big the extent of the economical problem will be and how expensive it is for the individual as well as the society in general.

    Second, in the field of investment and production, the Riba banking system allows the outflow of currencies to the wealthy people who are able to pay the loans while the poor ones bear the expenses as the prices of commodities rise up and this results also in national economy inflation which is disastrous for any economy.

    Finally, know that Allaah never forbade anything except it has some harmful effects.

    Allaah Knows best.

  4. Does interest has an effect on the national economy?

    Answer

    Praise be to Allah, the Lord of the Worlds; and may His blessings and peace be upon our Prophet Muhammad and upon all his Family and Companions. Riba has dangerous effects and bad consequences on the economy. This is one of the reasons why Allah forbade it. We will limit ourselves here to two disastrous effects of Riba on the national economies both in the consumption level and the production one.

    First, the Riba loans add to the exploitation of the poor and the needy as it results in more poverty, hence reducing their future earnings. On the other hand, these Riba loans make the rich creditors richer and add to their future earnings. It is known that the poor and needy classes constitute a big majority of the society. And, in case the income of this category of people decreases then their demand on the consumed and invested commodities decreases as well. So, if we know that this demand is actually the magic key that turns the wheel of the national economy, as a whole, we realize how big the extent of the economical problem there will be and how expensive it is for the individual as well as the society in general.

    Second, in the field of investment and production, the Riba banking system allows the outflow of currencies to the wealthy people who are able to pay the loans while the poor ones bear the expenses as the prices of commodities rise up and this results also in national economy inflation which is disastrous for any economy. Finally, know that Allah never forbade anything except there are some harmful effects to it. Allah knows best.

  5. Assalamu alaikum

    Why is Riba (Usury) forbidden? I need a convincing answer to give it to some of my brothers in town.

    Praise be to Allaah.

    Wa ‘alaykum al-salaam wa rahmat-Allaahi wa barakaatuhu.

    Riba is forbidden because of the harmful effects that result from it, such as:

    Economic effects, e.g., keeping money idle and unproductive, and swelling the ranks of the poor;

    Social effects, e.g., cutting ties, creating enmity and hatred between the poor and the rich, and spreading corruption and promiscuity caused by need;

    Psychological and spiritual effects, e.g., arrogance, looking down on others, hard-heartedness and exploiting the needs of the poor.

    The above describes the effects of Riba on the individual level. On the state level, countries are weakened, their resources fall under the control of others, they end up following their enemies’ desires, they are robbed of their natural wealth and their problems get even worse. This is what we see happening in reality. We ask Allaah to keep us safe and sound.

  6. Sabina Khan says:

    Assalamu alaikum

    jazakallah for the information on Riba..It has given me a deep insight .Just wanted to know whether trading in shares and mutual fund is haram.I assume since in shares and mutual funds there can be losses as well as profits hence it is like trading and it is allowed.Please clarify my doubt.It will be of great help.

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  8. Farooq Toor says:

    ALLOWED / PERMISSIBLE SHARES : If somebody wants to buy shares of manufacturing or production company,( as an example Cement factory, oil producing factory, cotton factory) this means that whatever share price of that company would be, at a later date, depends on REAL income earned from manufacturing, production and real transaction hence HALAL (PERMISSIMLE)

    NOT PERMISSIBLE SHARES : If somebody wants to buy shares of a banking company, this means that whatever share price of that bank would be, at a later date, depends on the income earned from Interest hence HARAM (NOT PERMISSIMLE)

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