1.1 In the 39th verse of the 30th Chapter of the Qur’aan [Q: 30.39], it is stated, “And when you give out anything for profit (minriban) in a way that the gain is effected by taking the rightful properties, earnings or dues of others (fee amwaalinnasi), then that is not a gain at all (fala yarbu) with Allah. And the real gainers are those who give out in charity (min zakatin), thereby seeking Allah’s pleasure.”
1.1.1 The verse was the first in the Qur’aan, in order of its revelation, to discuss the subject of Ar-Riba. Riba or Riban, in Arabic, literally means ‘gain’, ‘increase’ or ‘growth’. Its verb form is rubuww, which in turn means ‘to increase’ or ‘to grow’.
1.1.2 Obviously, it is not every gain, profit or increase that is despised by Allah in this verse. It is only a particular kind of it that is despised – the kind that is effected fee amwaalinnasi (i.e. in people’s amwaal).
1.1.3 People’s amwaal are their own rightful possessions. The term includes their rightful earnings, which they have not yet come in possession of: the salary rightfully earned by an employee, for example, which the employer has not yet paid. The term also includes other rightful dues, as for instance, anything given by one person from his own rightful possessions to another for temporary use of it by the latter or for safe custody.
1.1.4 It is thus clear, from the first part of the verse, that what Allah disapproves of is one kind of gain, and not all gains. That particular kind is the one that is effected by taking the amwaal – not one’s own but – of others. Allah abhors such gains obviously because of the injustice involved in those. The gainers in such cases do, as a matter of fact, usurp what should rightfully belong to others.
1.1.5 The kind of Riba (gain) that Allah abhors is further explained in the same verse by contrasting it with Zakat (charity). When you give something in Zakat, you give something of your own amwaal to others without expecting anything in return from the recipients. In the said kind of Riba, on the other hand, you would be usurping something of others’ amwaal, in addition to getting your own back.
1.1.6 In this verse, thus, Allah unequivocally defines the kind of Riba that He abhors. It is the gain that any party to a transaction contrives or manipulates to get by usurping the rightful dues, earnings or possessions of others. In verses subsequently revealed on the subject matter, this kind of Riba has been referred to as Ar-Riba. In this term, Riba is prefixed with the Arabic definite article Al, which is equivalent to the English ‘the’, but the term is pronounced as Ar-Riba. The Al prefixed to Riba in all the subsequently revealed verses unmistakably indicates the kind of Riba described in this verse, viz., Q: 30.39.
1.1.7 Contrary to the general belief, therefore, Ar-Riba stands very well defined in the Qur’aan. Not only is it well defined, but is further variously explained in other verses, as we shall presently see, to make us understand the term properly. It is to be noted that in verse, Q: 30.39, Ar-Riba has been described and condemned but not prohibited.
1.2 In accordance with a rule followed in the Qur’aan in taking gradual steps for eradication of an evil practice, Ar-Riba, condemned in the verse quoted above, was subjected to restrictions in the next verse revealed thereon. The next verse, viz. Q: 3.130, states: “O believers, do not devour Ar-Riba at doubled and redoubled rates. And be conscious of Allah for your own good.”
1.2.1 As may be seen, taking of exorbitant Ar-Riba was prohibited in this verse, but it was still not a total prohibition. It was so done perhaps not to create a sudden void in the general economy of that time. Instead, stress was laid on piety and self-restraint.
1.2.2 What is to be noted, however, is that the kind of Riba that was defined in the earlier verse, Q: 30.39, came to be referred to as Ar-Riba from this verse [Q: 3.130].
1.3 The next verse revealed on the subject matter is Q: 4.161. It states, “And they took Ar-Riba though they were forbidden to do so and devoured people’s amwaal wrongfully. And We have prepared a painful suffering for those who cover the Truth (i.e. who are nonbelievers) among them.”
1.3.1 The pronoun ‘they’ in this verse stands for the Jews. Ar-Riba had been prohibited to them. Allah informs Muslims about this to prepare them for the prohibition that would soon be coming on them (the Muslims) too.
1.3.2 The Muslims are thus warned of the consequences of disobeying the injunction.
1.3.3 They are also hereby given a further explanation or elaboration of the Qur’aanic meaning of Ar-Riba. They are informed that the term applies to wrongful acquisition (usurpation) of other people’s amwaal.
1.4 We now come to the group of verses with which Allah completed His instructions on Ar-Riba. These verses were among the last ones of the Qur’aan in order of its revelation.
1.5 The first verse in the said group is Q: 2.275. It states, “Those who devour Ar-Riba do not stand but as one on whom the Satan has cast his spell by touch. This is so because they insist that business (bai’a) is like Ar-Riba. And Allah has permitted business and prohibited Ar-Riba. So then, one, who desists, after receiving admonition from one’s Lord, shall retain one’s past gains and that one’s case shall be left to Allah for decision. And the ones who persist shall be those who would inhabit the Fire, therein to abide.”
1.5.1 It is in this verse of the Qur’aan that Allah finally and totally prohibits Ar-Riba. At the same time, He declares bai’a, i.e. business (wherein commodities or services are traded for reasonable profit), to be a permitted activity.
1.5.2 A significant feature of this verse is that it has pointedly referred to the misinterpretation that the term, Ar-Riba, is subjected to at the hands of some people. These people do so under satanic influence. Under this deceitful influence, they liken business to Ar-Riba.
1.5.3 I have no knowledge of such people so misinterpreting Ar-Riba at the time the Qur’aan was revealed. But I am aware of such people in my age. They condemn one of such businesses, which Allah has permitted, as Ar-Riba. They do not mind, however, themselves devouring other people’s amwaal!
1.5.4 They do so in various subtle ways. Some evade taxes due to Government and other statutory institutions. Some, engaged as traders, take advantage of a situation of scarcity to enhance their profit margins substantially. Employers underpay their employees. Employees shirk their work but receive their full salaries. Taxi-drivers demand money, more than the metre-readings, on some pretext or the other.
1.5.5 Such ways are a legend and can be found in every field of activity. Among the perpetrators, unfortunately, are even some who are very religious. They have a holier-than-thou attitude but are blissfully unaware that they are themselves guilty of taking Ar-Riba.
1.5.6 And such are the people described as being under the satanic spell in the verse.
1.5.7 Allah then declares in the verse a general amnesty to those who desist from Ar-Riba. Although such people retain their gains due to past Ar-Riba dealings, their fates in the Hereafter are left to Allah’s decision. The decision perhaps would depend on their future behaviour.
1.5.8 But as for those who persist in Ar-Riba, their fates in the Hereafter are sealed. They will go to Hell.
1.6 The next verse, Q: 2.276, declares, “Allah annihilates Ar-Riba and renders fulfilling of obligations to the poor and needy, fruitful. And Allah loves not any sinful suppressors of Truth (non-believers).”
1.6.1 This verse gives further expression to Allah’s utter displeasure against perpetrators of Ar-Riba. At the micro level, the displeasure may not immediately be discernible in cases of individuals. A person indulging in Ar-Riba may continue for some time to appear prosperous. Allah gives him/her a long rope. The person may even be seen departing from this world still apparently prosperous. Allah’s warning is basically for the other world. Life in this world is after all infinitesimally small compared to the interminable life in the other. Still, Allah makes examples of some such persons in this very world and annihilates their ill-gotten wealth. For others to take heed.
1.6.2 At the macro level of communities or nations, however, Allah’s displeasure at Ar-Riba dealings is very much discernible. Nations and communities wherein corruption is rampant have their economies in doldrums. Economic corruption is nothing but Ar-Riba. No nation is free from corruption. But nations, which are less prone to this malady, are the ones that have better economies even when such nations may not be endowed much with natural resources.
1.6.3 Ar-Riba has been contrasted in this verse with Sadaqaat. The latter Arabic term is used for payment of moral dues to the deserving, including the poor and needy. The Qur’aan says elsewhere, [Q: 9.60], that Allah has made Sadaqaat obligatory. This indicates that Ar-Riba dealings involve non-fulfilment of moral obligations in human transactions. A little reflection will show that Allah has here elaborated the meaning of Ar-Riba, which had already been defined previously in verse Q: 30.39.
1.7 Now we come to the last two (in order of revelation) verses specifically regarding Ar-Riba. These are taken together here, as these are closely inter-linked: “O believers! Fear Allah and give up what remains of Ar-Riba, if you do really believe. And if you do not do so (i.e. give up Ar-Riba), then be warned that you are in a state of war with Allah and His Messenger. And if you repent, then you are entitled to get back your capital dues. You shall wrong not, nor shall you be wronged.” [Q: 2.278 & 279]
1.7.1 These verses too are very important in understanding the Qur’aanic concept of Ar-Riba. In the first of these two verses, Allah Almighty once again stresses the enormity of the crime of Ar-Riba. It is a crime against humanity. It is the perpetrator of economic injustices and disorders in this world. It is one of the primary causes of all the troubles here. It leads humanity away from the straight path Allah has laid down for it. That is why He declares that those who indulge in Ar-Riba are at war with Him and His Messenger.
1.7.2 Then, in the second of the two verses, Allah declares that those who desist from taking Ar-Riba have the right to take back their capital dues. The actual Arabic word used for dues is amwaal. We have seen what amwaal generally means in 1.1.3 above. But one important aspect of this word needs to be stressed here in order to understand Ar-Riba properly.
1.7.3 And in order to understand this aspect, it should first be clearly understood that money is not amwaal per se. Money is only the current value of amwaal. Amwaal of the same quantity and quality may have different values at different points of time. If one kilogram of sugar of a certain quality costs 16 units of money now, it might have cost only 8 units 10 years ago. If one hour of labour now costs 20 units of money, it might have cost, say, 9 units only, 10 years ago. Thus, while amwaal (sugar and labour, in the examples given here) remain the same, their value in terms of money may change.
1.7.4 Now it should carefully be noted that Allah, in His all-encompassing wisdom, has always referred to Ar-Riba in terms of amwaal and not in terms of their value, i.e. money. In the verses presently under discussion too, He tells us that we are entitled to get back our capital amwaal (and not sums, as some have erroneously translated the word). Let us consider, more elaborately, what this means.
1.7.5 Suppose I am quite rich (although, in fact, I am not). And I have a friend, who is also quite rich. But, two years back, my friend was in financial difficulties and then he needed a car very badly. I had then just bought a car of X brand and Y model. I gave it to the friend and bought another for me. Now, two years after that event, my friend has got over his financial difficulties and wants to pay back the loan.
1.7.6 How can he do that? He cannot just hand over to me the car he has been using for two years. If he does that, I am wronged, and Allah says, in the verse under discussion, that I should not be wronged. I would not be wronged in this case only if I now need another car and my friend gives me a brand-new car of the same X brand and Y model. That too if, as a friendly gesture, I do not ask for any compensation from my friend, for his two-year use of my car.
1.7.7 But what if I do not want now to have that type of car and want to have the costlier Z model? I cannot ask my friend to give me the Z model; for, if I do so my friend would be wronged, and I would (Allah forbid) be going against Allah’s express command in the verse under discussion. Therefore, the only right course for my friend to adopt would be to give me the present market price of a new car of the X brand and Y model. He should do so even if the price of the said car had appreciated by a few thousand units of money during the two-year period. Then only would neither party be wronged.
1.7.8 On the same analogy, had my friend taken from me the cost, say a quarter million units of money, of the car then and not the car itself, he should pay me now the quarter million plus the few thousands by which the price has appreciated. And had my friend taken the money, not for buying a car, but for meeting some urgent domestic need of his, he has now to pay me the present equivalent of the amount calculated as per the consumer price index. If the index has increased by 10%, the amount to be returned by my friend has also to be increased by the same percentage.
1.7.9 Money, as a matter of fact, is not a material thing. It is a power – a power to purchase material things or services. When I gave my friend the said amount two years back, I gave him a certain purchasing power. That purchasing power, and not the amount as such, constituted the amwaal of Qur’aanic terminology in this case. My friend must return that principal amwaal i.e. that principal purchasing power. If he returns to me only the same amount he would be returning less than my principal amwaal. I would be wronged then, and the divine commandment would be vitiated.
1.7.10 And had my friend taken the money for investment in a new commercial venture of his, the parameter for the return of the loan would change. He would have now to pay me not only the present value of the purchasing power he had taken from me, but also in addition the proportionate share in the profit the venture might have earned during the period. It would be wrong and unjust on the part of my friend if he does not give me this share; for, without the loan I had given him, the commercial venture could not have been brought to fruition. Profits are the amwaal earned in the venture. These profits were the result brought about by three factors:
Capital invested by my friend himself,
Loan I had given, and,
Services put in by my friend.
Every one of these three factors shall have a rightful proportionate share in the profits. The three shares of the three factors are therefore their respective rightfully earned amwaal. If my friend does not give me the share due to factor b, it would be tantamount to his seeking increase in his wealth by usurping my amwaal – a clear case of Ar-Riba in terms of verse Q: 30.39.
1.7.11 It may be noted here that when I gave the loan to my friend, I provided him with a thing he needed. It was just like the grocer providing groceries for my family’s needs or a builder constructing office premises for me for running my business. Both the grocer and the builder take from me their service charges in addition to the costs to them of the things they give me. That is the general basis on which all human transactions are done. Such service charges are never subject to the use or misuse, productive or unproductive, to which the things supplied are put to by the recipients. As for example, the builder does not base his service charges on the success or failure of the business I conduct through the office he built for me. Neither would the grocer repay me his profit margin on the eggs that I bought from him but broke, falling accidentally down from my hand on my way home.
1.7.12 Such service charges or profits, or whatever you call them, are worked out, as a norm, at predetermined fixed rates. Nothing wrong in this from the Islamic point of view. Reasonable service charges are the rightful amwaal of the service providers, and these must necessarily be at fixed rates depending on the efforts put in and time consumed in providing the services. These charges are also subject, of course, to the open market forces.
1.7.13 There is no reason therefore why I should have necessarily subjected the returns on my loan, given to my friend two years back, on the success or failure of his venture. Unless, of course, we had both agreed to be partners in the venture. Since we had not, I had the right to claim compensation for the deprival to me for two years of the equivalent purchasing power then. I could have utilised the loan amount for purchasing things for my own business and earned profits thereon during that period. I could therefore justifiably claim the compensation at a reasonable pre-determined fixed rate (say, the rate at which I earned my profits on my investments two years back), just as the grocer and the builder do in claiming their service charges or profits.
1.7.14 That Islam (as propounded basically in the Qur’aan) does not permit recovery of service charge or any compensation (even if it be called as interest) at fixed rates, is a myth. What Islam requires is that such rates should be justifiable and reasonable and determined on the principle that neither the service provider nor the service recipient should be wronged. It is another matter that in the present example, I may not ask for any compensation out of consideration for a friend, but I do have the right.
1.8 The Qur’aan does not deny anyone his/her due rights. But it strongly advises all human beings to be humane too while claiming their due rights. Let us now consider this divine advice as a fitting finale to this Chapter discussing the Qur’aanic verses on Ar-Riba.
1.8.1 In verse Q: 2.280, which immediately follows the Ar-Riba verses mentioned above, Allah says, “And if he (the recipient of services) be in difficulties, then grant him time till it is easy for him to discharge his liabilities. And if you remit your dues in deserving cases, it would be for your good, if you but knew.”
1.8.2 Remittance of one’s dues in deserving cases is termed as Sadaqah or one’s moral obligation in the verse. To understand the obligation, let me extend the case, mentioned herein above, of my giving a loan to my friend. If I find that the friend continues to be in financial difficulties, I have to grant him further necessary extensions for making the repayment. And, suppose, my financial condition continues to be rosy, while his deteriorates to the extent that he would not be able to repay the loan in the foreseeable future. Then, in view of this Qur’aanic verse, it would be my moral obligation to remit the loan. As a true Muslim, I should have the innate faith in me that Almighty Allah shall make this Sadaqah fruitful for me as promised by Him in verse Q: 2.276.
1.9 I believe that a dispassionate, unprejudiced, sincere and meticulous study of the verses quoted above shall reveal to an ardent student of the Qur’aan that the divine injunction on Ar-Riba is
a) Aimed at eliminating injustices in all human transactions,
b) Well-defined and well-explained in the Qur’aan itself,
c) A commandment, the violation of which is very, very seriously viewed by Allah – to such an extent that He has declared a war on the violators and has promised them the Hell,
d) However, grossly misunderstood by equating Ar-Riba to ‘interest’ as such, and,
e) Therefore, widely violated by Muslims themselves, thus inviting Allah’s ire on them, which is very much reflected in the pathetic present-day status and condition of their community, generally, the world over.
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