It is said that “Interest” cannot be avoided in today’s world. Is this true?
In the Name of Allah, the Most Gracious, the Most Merciful.
As-salāmu ‘alaykum wa rahmatullāhi wa barakātuh.
Ribā, or interest, is strongly prohibited in Islam. Consider the following verses and ahādīth:
Allah Ta‘ālā says:
وأحل الله البيع وحرم الربا
“Allah has permitted sale and prohibited ribā (interest/usury).” (Qur’an, 2:275)
Allah Ta‘ālā also says:
يا أيها الذين آمنوا اتقوا الله وذروا ما بقي من الربا إن كنتم مؤمنين، فإن لم تفعلوا فأذنوا بحرب من الله ورسوله
“O you who believe, fear Allah and leave out the remains of ribā, if you are (true) believers. If you do not do so, then let it be an announcement of war with Allah and His Messenger.” (Qur’an, 2:278-9)
Allah Ta‘ālā further says:
يا أيها الذين آمنوا لا تأكلوا الربا أضعافا مضاعفة
“O you who believe, do not consume ribā, doubled and multiplied.” (Qur’an, 3:130)
The hadiths of Rasūlullāh (sallallāhu ‘alayhi wasallam) are equally strict on the prohibition of all forms of ribā.
Rasūlullāh (sallallāhu ‘alayhi wasallam) cursed the one who receives interest and the one who gives it. (Sahīh Muslim; Mishkāt al-Masabīh, 2807)
Rasūlullāh (sallallāhu ‘alayhi wasallam) said:
درهم ربا يأكله الرجل وهو يعلم أشد من ستة وثلاثين زنية
“One dirham of ribā a man consumes knowingly is worse than thirty three acts of illicit intercourse.” (Musnad Ahmad; Mishkāt al-Masabīh, 2825)
There are many reasons for the strict stance Islam has taken against usury. In an economy infested with usury, we are in a better position to understand the strict stance of Islam. Interest favours the rich and impoverishes the poor. The major imbalance in the distribution of wealth in today’s world is a direct consequence of the capitalist economy, which is based on usury. Hence, interest is a great source of injustice and oppression, referred to as such in the Qur’an (2:179). As Muslims, therefore, we must make all effort to avoid interest.
Since Allah Ta‘ālā has ordained that interest is harām, it entails that interest is avoidable. Allah Ta‘ālā would not ask us to do something impossible. The Qur’an says:
لا يكلف الله نفسا إلا وسعها
“Allah does not task a soul beyond its capacity.” (2:286)
We understand that the world today is infested with interest. In fact, this situation was prophesised in a hadith reported from RasūlAllāh (sallAllāhu ‘alayhi wasallam):
ليأتين على الناس زمان لا يبقى أحد إلا أكل الربا فإن لم يأكله أصابه من بخاره
“A time will come on the people when none will remain but he consumes interest, and if he does not consume it, its vapours will reach him.” (Ahmad, Abū Dāwūd, an-Nasā’ī, Ibn Mājah; Mishkāt al-Masābīh, 2818)
Indeed, it is a great challenge in today’s time to stay clear of interest.
Allah Ta‘ālā says:
أَحَسِبَ النَّاسُ أَن يُتْرَكُوا أَن يَقُولُوا آمَنَّا وَهُمْ لَا يُفْتَنُونَ
“Do people think that they will be left alone only on their saying, ‘We believe,’ and will not be put to any test?” (29:3)
The test of īmān is to face the challenges that Allah Ta‘ālā has set for us. Although interest is prevalent and the economy is infested with interest, as Muslims we must ensure that all our dealings are free of usury. In doing so, we must trust in Allah, and have faith that He will take care of our provisions. Allah Ta‘ālā says:
ومن يتّق الله يجعل لّه مخرجا، ويرزقه من حيث لايحتسب، ومن يّتوكّل علي الله فهو حسبه
“Whosoever fears Allah (by observing His commandments), He will make a way out for him. And he will provide him from where he did not imagine. And whosoever puts his trust in Allah, then He will suffice him.” (65:3)
If the whole world practised nudity, should Muslims stoop down to their level and also practise nudity?
Rather, Muslims must take all precautions to ensure that this practice is avoided and does not infiltrate their communities. In the same way, Muslim communities should not succumb to the pressure of accepting the current usurious economy. Instead, they must make their own financial arrangements that are free of interest and anything that does not conform to the Shari‘ah.
And Allah Ta‘ālā Knows Best
Student Darul Iftaa
Checked and Approved by,
Mufti Ebrahim Desai.
Are your Transactions Shari'ah Compliant?
Miscellaneous Etiquettes of Transactions:
The mutual consent of all the parties is vital for the validity of the transaction
All transactions that contain a form or an element of Interest or gambling are prohibited in Islam
The price, the commodity and the time should all be specified and should not be unknown or uncertain
The deal must not involve any excessive ambiguity or deception
Any of the parties should not stipulate a condition which advantages simply any one of them
The seller should not deceive, lie or breach the trust of the customer
Neither of the parties should stipulate a condition which binds one transaction to another or to a loan
The following commodities should not be sold:
No one may dispose of the property of another without the latter’s permission
The seller must not conceal the faults in the goods being sold
What is prohibited to take, is prohibited to give
A purchaser must not resell a commodity prior to taking possession of it
The trader should not give the customer than what the customer is paying for; but rather he should give a little extra.
It is permissible to claim from a debtor only that amount that was initially lent to him.
It is not permissible for a creditor to take any benefit from the pawned item since this will constitute interest.
In a mutual partnership: Profit is based on the agreement of the parties, but loss is always subject to the ratio of investment.
The employee should be paid his wages “even prior to his perspiration drying”.
It is permissible to deal in cash or credit sale. However, in a credit sale, the amount and the duration of the credit must be specified at the time of the transaction.
Written by: Hanif Patel, Student Darul Iftaa - UK
Report on Shariah Compliant Business Campaign from an Alim in Zambia
The Darul Iftaa conducted a beautiful Shariah compliant business campaign program in Lusaka. This was the first of its kind in Zambia which generated a great interest in the community and was well attended. The program had a tremendous impact on all those who attended. From the response we could gauge that brothers who were unable to attend felt they missed out on a great opportunity.
The one very important observation which i made and was appreciated by the crowd was Hadhrat Mufti Saheb explaining modern day transactions and providing the practical alternatives for it for e.g. Mufti Saheb stated the issue of taking deposits is an Amanah, and therefore in principle the lessor cannot use it. Thus, Mufti Saheb gave an alternative that the lessor could insead take advance rent which would enable him to use the deposit. Most importantly the public realized that there is a practical alternative to the conventional system. There were a number of questions after the program, however due to lack of time we were unable to complete them. We hope Hadhrat Mufti Saheb accepts our invitation in the future so that the community in Zambia may benefit much more.
Hereunder is a brief on the topics discussed
Where did you earn your money?
Where did you spend it?
- (Moulana)Mohammed Patel, Zambia
I have a question about house financing. Due to my income, I can't get an approval from one of the Sharia financing companies here in USA, like Guadance, LaRiba or Ijara, but I can get an approval from other banks.
The question I have is, what if I go with another bank with 30 yrs financing and tell them to calculate the interest rate for 30 yrs and add it to the purchase price of the house and it'll be the same amount of monthly payment every month if I pay more than the minimum payment and also it will not be a problem if I pay the loan off early or 30 yrs, the loan amount will be same for paying it off with in 1 year or 30 years. If I go that route my monthly payment would be less than renting a house since I'm married and have 4 kids.
Guidance and other sharia banks won't approve me since my pay don't meet their requirements. Lots muslims here in USA do that when they buy cars, they buy down the interest rate and it's added with the purchase price, so the purchase price stays same. So I want to know if it's permissible to buy down the interest rate if I go with any other bank?