8l8A /ln1L8LS1/uSu8?

8lba (lnLeresL usury) ls prlmarlly an economlc lssue ln vlew of Lhe facL LhaL all rellglons and myLhologles
have prohlblLed resLrlcLed dlscouraged dlsllked or degraded 8lba ln one way or Lhe oLher slnce Lhe
lncepLlon of human lnLeracLlon All Lhree ma[or revealed (llhaml) rellglons le lslam ChrlsLlanlLy and
!udalsm have sLrongly condemned and prohlblLed 8lba ln lLs orlglnal verslons LaLer Lhe clerlcs of !ews
and ChrlsLlan Church abandoned Lhe prohlblLlon of 8lba (lnLeresL usury) LhaL led Lhe manklnd lnLo Lhe
economlc anarchy of Lhe presenL era
1he Def|n|t|on Cf Interest
1he llLeral meanlng of lnLeresL or Al8l8A as lL ls used ln Lhe Arablc language means Lo excess or
lncrease ln Lhe lslamlc Lermlnology lnLeresL means efforLless proflL or LhaL proflL whlch comes free from
compensaLlon or LhaL exLra earnlng obLalned LhaL ls free of exchange PazraL Shah Wallullah uehlvl a
greaL scholar and leader has glven a very conclse and preclse deflnlLlon of lnLeresL Pe says
8lba` ls a loan wlLh Lhe condlLlon LhaL Lhe borrower wlll reLurn Lo Lhe lender more Lhan and beLLer Lhan
Lhe quanLlLy borrowed
Interest In reIs|am|c 1|mes
Paflz lbn Pa[r wrlLes ln hls commenLary of Sahlh 8ukharl (laLhul 8arl)
lmam Mallk reporLs on Lhe auLhorlLy of Zald lbn Aslam LhaL ln Lhe perlod of lgnorance (prelslamlc
Llmes) lnLeresL was changed accordlng Lo Lhe followlng scheme Cne person had a rlghL ln Lhe properLy
of anoLher person lL may have been a general rlghL because of Lhe amounL lenL or Lhe prlce of
someLhlng purchased or ln any oLher form A Llme was seL when Lhe clalm would be seLLled When Lhe
appolnLed Llme arrlved Lhe credlLor would ask Lhe debLor lf he wanLed Lo seLLle Lhe clalm or pay lnLeresL
wlLh an exLenslon Lo Lhe Llme lf Lhe clalm was seLLled Lhen Lhere was no lncrease ln Lhe paymenL
CLherwlse Lhe debLor would lncrease Lhe amounL payable and Lhe credlLor would exLend Lhe perlod
furLher
Is|am's V|ew Cf 1rade
lnLeresL ls noL a sub[ecL wlLhouL Lrade and commerce lslam recognlses Lrade and commerce noL only as
a lawful professlon buL also as a moral duLy lslam has lald down a compleLe seL of rules for Lrade 1he
reason for Lhese rules ls Lo speclfy whaL halal earnlng ls 1here are many LradlLlons (AhaadlLh)
concernlng halal provlslon LhaL can also be found ln Lhe books conLalnlng Lhe LradlLlons of Lhe propheL
(peace be upon hlm) AcLually lslam has encouraged men Lo earn Lhelr own provlslon and Lo provlde lL
Lo Lhelr famllles 1he condlLlon ls LhaL Lhe earnlng has Lo be accordlng Lo Lhe condlLlons seL by Lhe
Sharl'ah Any sorL of LransacLlon LhaL does noL correspond Lo Lhe rules of Lrade wlll noL be allowed
1hese rules can be found under Lhe headlng of Lrade ln Lhe books of [urlsprudence lnLeresL ls amongsL
Lhose condlLlons whlch all deallngs musL be free from


ow Is Interest I||ega|
1he deflnlLlon of lnLeresL has already been menLloned as well as LhaL lL ls prohlblLed lf we explore Lhe
Cur'an we wlll come across aL leasL four places where Allah has menLloned lnLeresL
1he flrsL one ls ln Surah Albaqarah verse no273
1hose who devour usury wlll noL sLand excepL as sLands one whom Lhe SaLan by hls Louch has drlven Lo
madness 1haL ls because Lhey say Lrade ls llke usury buL Allah has permlLLed Lrade and has forbldden
usury
ln Lhe nexL verse verse 276 ln Lhe same place he says
Allah wlll deprlve usury of all blesslng and wlll glve lncrease for deeds of charlLy for he does noL love
any ungraLeful slnner
1wo verses laLer ln verse 278 he says
Ch you who belleve! lear Allah and glve up whaL remalns of your demand for usury lf you are lndeed
bellevers
ln verse 279 he says
lf you do noL Lake noLlce of war from Allah and hls Messenger sallallahu alalhe wasallm buL lf you
repenL you shall have your caplLal sum ueal noL un[usLly and you shall noL be dealL wlLh un[usLly
ln Lhe second place ln Surah Aallmran verse no130 Allah says
Ch you who belleve ! uevour noL usury doubled and mulLlplled buL fear Allah LhaL you may prosper
ln Lhe Lhlrd place ln Surah Alnlsaa' Allah sLaLes ln verse 161
1haL Lhey Look usury Lhough Lhey were forbldden and Lhey devoured peoples wealLh wrongfully we
have prepared for Lhose amongsL Lhem who re[ecL falLh a grlevous chasLlsemenL
ln Lhe fourLh place Surah Al8oom verse no39 Allah menLlons
1haL whlch you glve ln usury for lncrease Lhrough Lhe properLy of people wlll have no lncrease wlLh
Allah buL LhaL whlch you glve for charlLy seeklng Lhe counLenance of Allah lL ls Lhese who wlll geL a
recompense mulLlplled
Ahaad|th Concern|ng Interest

1hese ahaadlLh have been Laken from MlshkaLulMasablh under Lhe secLlon of lnLeresL and Lhe Lngllsh
LranslaLlon has been Laken from lLs Lngllsh verslon wrlLLen by Al Pa[[ Moulana lazl karlm
(218227 vol ll)
PazraL !ablr radlyallahu anhu has reporLed LhaL Lhe Messenger of Allah sallallahu alalhe wasallm cursed
Lhe devourer of usury lLs payer lLs scrlbe and lLs Lwo wlLnesses Pe also sald LhaL Lhey were equal (ln
sln)
(Musllm)
PazraL Abu Puralrah radlyallahu anhu reporLed LhaL Lhe Poly ropheL sallallahu alalhe wasallm sald A
Llme wlll cerLalnly come over Lhe people when none wlll remaln who wlll noL devour usury lf he does
noL devour lL lLs vapour wlll overLake hlm (Ahmed Abu uawood nlsal lbn Ma[ah)
PazraL Abu Puralrah radlyallahu anhu reporLed LhaL Lhe Messenger of Allah sallallahu alalhe wasallm
sald usury has goL sevenLy dlvlslons 1he easlesL dlvlslon of Lhem ls a man marrylng hls moLher (lbn
Ma[ah)
PazraL Abu Puralrah radlyallahu anhu reporLed LhaL Lhe Messenger of Allah sallallahu alalhe wasallm
sald l came across some people ln Lhe nlghL ln whlch l was Laken Lo Lhe heavens 1helr sLomachs were
llke houses whereln Lhere were serpenLs whlch could be seen from Lhe fronL of Lhelr sLomachs l asked
C Cabrlel! Who are Lhese people? Pe replled Lhese are Lhose who devoured usury (Ahmed lbn Ma[ah)
PazraL All radlyallahu anhu reporLed LhaL he heard Lhe Messenger of Allah sallallahu alalhe wasallm
curslng Lhe devourer of usury lLs glver lLs scrlbe and one who refuses Lo glve ZakaL and he used Lo
forbld mournlng (nlsal)
PazraL umar bln AlkhaLLab radlyallahu anhu reporLed Lhe lasL of whaL was revealed was Lhe verse of
usury 1he Messenger of Allah sallallahu alalhe wasallm was Laken and he had noL explalned lL Lo us So
glve up usury and doubL (lbn Ma[ah uarlml)
PazraL Abdullah bln Panzalah radlyallahu anhu (who was washed by Lhe angels) reporLed LhaL Lhe
Messenger of Allah sallallahu alalhe wasallm sald A dlrham of usury LhaL a man devours and he knows ls
greaLer Lhan 36 fornlcaLlons (Ahmed uarquLnl)
8alhaql reporLed from lbn Abbas radlyallahu anhu ln shuabul lman Pe added and sald (as for) one
whose flesh has grown ouL of unlawful food Lhe flre ls more sulLable for hlm
AfLer narraLlng all Lhese verses from Lhe Cur'an and relaLlng all Lhe AhaadlLh lL ls apparenL Lo us LhaL
lnLeresL could never be legal and halal Pow could anybody even Lake Lhe Llme ouL Lo Lhlnk abouL a
maLLer ln whlch Allah has declared war on Lhe user and hls 8eloved ropheL sallallahu alalhe wasallm
has cursed hlm? As senslble people we can undersLand LhaL whaL our creaLor has chosen for us ls for our
own prosperlLy only


Interest Irom A Iur|sprud|ca| V|ew
We should deeply Lhank Lhe Sahaabah radlyallahu anhum ln Lhelr efforLs Lo spread Lhe rellglon as Lhey
learnL lL from Lhe ropheL sallallahu alalhe wasallm 1hen when Lhe rellglon sLarLed Lo spread vasLly
Allah broughL abouL four lmams who descrlbed Lhe rellglon ln general Lerms ln order Lo make Lhe
common publlc undersLand 1hey spenL Lhelr llves Lrylng Lo puL Lhe whole rellglon ln a collecLlve form
Lhrough Lhe Cur'an and Lhe AhaadlLh and Lhe conclse declslons of Lhe Sahaabah radlyallahu anum ln
Lhe case of lnLeresL all four lmams esLabllshed a general rule malnly concenLraLlng on Lhls sLaLemenL
made by Lhe ropheL sallallahu alalhe wasallm
PazraL Alkhudrl radlyallahu anhu reporLed LhaL Lhe ropheL sallallahu alalhe wasallm sald Cold ln
exchange for gold sllver ln exchange for sllver wheaL ln exchange for wheaL barley ln exchange for
barley daLes ln exchange for daLes salL ln exchange for salL ls ln Lhe same caLegory and (should be
exchanged) hand Lo hand so who ever adds or demands lncrease he has pracLlsed usury 1he glver and
Laker are Lhe same
CuL of Lhe four lmams lmam Abu Panlfah has ruled LhaL lf Lhe measuremenL sysLem (volumeLrlc or ln
compounds) ls Lhe same and Lhe Lwo lLems are ln Lhe same caLegory Lhen Lhey should be sold ln Lhe
same amounL and dlrecL noL ln credlL oLherwlse lnLeresL wlll be found
lmam Shaf'ee says LhaL lf Lhe lLems are valuable and could be consldered food Lhen Lhere ls Lhe chance
of lnLeresL lmam Mallk says LhaL lf Lhe lLems are valuable and are edlble Lhen lnLeresL ls a sub[ecL
Adv|ce
As you may have reallsed glvlng and Laklng lnLeresL ls unlawful unforLunaLely Lhe basls of many of Lhe
LransacLlons (especlally ln banklng and lnsurance) personal or buslness lnvolve lnLeresL 1hus lL ls
becomlng lncreaslngly dlfflculL for Lhe ma[orlLy of Lhe Musllms especlally Lhose who are comerclally
orlenLaLed Lo absLaln from deallngs lnvolvlng lnLeresL Many of us purchase lLems on '8uy now ay
laLer schemes Lhlnklng LhaL Lhls sorL of scheme ls of greaL beneflL Lo us Sadly whaL we fall Lo recognlze
aL Lhe Llme of purchaslng Lhls 'supposed bargaln ls Lhe facL LhaL lf we fall Lo pay Lhe requlred amounL aL
Lhe due Llme we wlll be llable Lo pay lnLeresL
now suppose a couple of monLhs ago we were purchased an lLem on a 'ay laLer scheme ln whlch
Lhere was no quesLlon abouL us keeplng upLo daLe wlLh paymenLs however due Lo a change ln our
flnanclal slLuaLlon we have falled Lo pay Lhe requlred amounL and are paylng lnLeresL now as a resulL
We would have [olned a group of Lhose unforLunaLe people who have been cursed by Lhe ropheL
Sallallahu Alayhl Wassallam
Cur advlce Lo anyone who ls lnvolved ln any form of lnLeresL ls LhaL Lhe lndlvldual should mlnlmlse hls
expendlLure ln Lhese deallngs and lf posslble absLaln compleLely from Lhese LransacLlons ln any case
every lndlvldual should conLlnue Lo seek Allah's forglveness 1he phllosophy shows LhaL a person who
Lakes lnLeresL does noL galn anyLhlng ln reallLy buL Lhrough Lhe explanaLlon of Lhe Cur'an verse

Allah decreases lnLeresL and lncreases sadqah
1haL ln reallLy Lhe money [usL goes Lo wasLe and Lhe person does noL even reallse and a person who
glves money ln Lhe paLh of Allah ln whaLever form lL may be acLually galns alLhough ln reallLy lL seems
as Lhough he ls looslng ouL
Lvery person should Lake all necessary precauLlons ln Lhelr flnanclal and soclal deallngs lf a person
neglecLs ln keeplng a waLchful eye on flnanclal deallngs Lhls negllgence wlll slowly spread Lo oLher
aspecLs of rellglon 1hls wlll have a very deLrlmenLal effecL on rellglous maLLers
1he deallngs of usury and lnLeresL are noL only a dlsadvanLage Lo us ln Lhls world buL wlll also be a
source of greaL dlscomforL and paln for us ln Lhe hereafLer 1he ropheL Sallallahu Alayhl Wassallam has
lnformed us abouL Lhe punlshmenL LhaL awalLs Lhose people who deal wlLh lnLeresL
PazraL Abu Puralra 8adhlallaho Anhu has reporLed Lhe saylng of Lhe ropheL Sallallahu Alayhl
Wassallam LhaL durlng hls ascenslon (Mlraa[) he noLlced a group of men whose sLomachs were bloaLed
Lo Lhe slze of blg rooms and Lhelr wanLlng Lo move from Lhelr poslLlons was lmposslble 1hey would be
crushed ln a sLampede by Lhe frlends of llrawn 1he ropheL Sallallahu Alayhl Wassallam seelng Lhelr
condlLlon asked PazraL !lbraeel Alayhls Salaam abouL Lhelr ldenLlLy Pe was lnformed LhaL Lhey were Lhe
people who lndulged ln deallngs of usury and lnLeresL"
1he summary of Lhe maLLer ls LhaL lnLeresL ls hazardous and should be absLalned from ln all manners lf
anybody has a case Lhey wlsh Lo solve Lhen Lhey should conLacL a MufLl and presenL Lhelr problem as lL
ls
l conclude by asklng you my dear reader ls lL really worLh desLroylng Lhe eLernal llfe of Lhe hereafLer
[usL so LhaL we may have a few more comforLs ln a llfe whlch can come Lo an end any momenL
roh|b|t|on of k|ba |n uran
' - ' | - ,- - -' '; - - '; - ' ^ --' '; , - ; ' - - , - ' ,-' , - - ,- - - -
, - - '; - - '; - - - , ~, = , - ^ --' ^ -; ~ , ; , ; - - - ,; , - -' ;- V ,; - -= V ; ,; - -=
- ,;~,- - ' 2 - 278279

C ye who be||eve! Iear A||ah and g|ve up what rema|ns of |nterest |f you are tru|y be||evers 8ut |f you
do |t not then beware of war from A||ah and |s Messenger and |f you repent then you sha|| have
your pr|nc|pa| thus you sha|| not wrong nor sha|| you be wronged
Chapter 2 A| 8aqara Verses 278279

, - = - , - ,- - -' '; -' ' -- , = |- - - , ' - = - = | - - ~ ; , - J- ~ ^ --' ' ,- - -
-= ; ' ,-' - - ; | -'; ^- - | -- ; J' ;- ,' --' J =' -' ' -- - ; ,- , -' -- - |- - ' ' - - ' -- -
- ,;~-' ~- -' 4 - 160161

So because of the transgress|on of the Iews We forbade them pure th|ngs wh|ch had been a||owed to
them and a|so because of the|r h|nder|ng many men from A||ah's way And because of the|r tak|ng
|nterest a|though they had been forb|dden |t and because of the|r devour|ng peop|es wea|th
wrongfu||y And We have prepared for those of them who d|sbe||eve a pa|nfu| pun|shment
Chapter 4 AnN|sa Verses 160161

' - ' | - ,- - -' '; - - V '; - - ' ,-' ' -' ~ - -' ~ - '; - ' ; ^ --' - - - ,; = --
- ,;~J ,' ,--3 - 130

C ye who be||eve! Devour not |nterest |nvo|v|ng mu|t|p|e add|t|ons and fear A||ah that you may
prosper
Chapter 3 Aa|Imran verse 130

,- - -' ,; - - - ' ,-' V ,; -; - - V ' - - ; - - - -' ^ = = - ,' =- ~-' , - , --' 4 - - | - '; -' - ' - - - -' J- - ' ,-' J = ; ^ --' - -' , = ; ' ,-'
, - - --' = = -; - , - ^ , _ | -' - ^ - - ' - ~ - ~ - ,- ; _ - ^ --' , - ; -' - 4 -- -; - ~' =~ ,' --' ' |- - ,; - -' =
- ,;~,- - ' 2 - 27S

1hose who devour |nterest do not r|se except as r|ses one whom dev|| has sm|tten w|th |nsan|ty 1hat
|s because they say '1rade a|so |s ||ke |nterest' whereas A||ah has made trade |awfu| and has made
|nterest un|awfu| So e to whom an admon|t|on comes from h|s Lord and he des|st then w||| that
wh|ch he rece|ved |n the pass be h|s and h|s affa|r rests w|th A||ah And those who revert to |t they
are the compan|ons of the I|re there|n sha|| they ab|de
Chapter 2 A| 8aqara Verse 27S

' - ; - , - ' , ; , - - - - J' ; ,' --' > - ; , - -- - ^ --' ' - ; - , - , ' - , ,; -- , ^= ; ^ --' 4 - -; - ,; - ~ --'
- ,;~;,- ' 30 - 39

Whatever you |ay out at |nterest that |t may |ncrease the wea|th of the peop|e |t does not |ncrease |n
the s|ght of A||ah but whatever you g|ve |n 2akat seek|ng the p|easure of A||ah |t |s these who w|||
|ncrease the|r wea|th man|fo|d
Chapter 30 Ar kum Verse 39

1he uran|c word for the usury or the |nterest |s k|ba wh|ch means an |ncrement excess or add|t|on
to the amount |ent Not every |ncrement |s regarded as usury as the money |ncreases |n the bus|ness
or trad|ng too Such |ncrement |s ca||ed prot and the uran a||ows th|s add|t|on wh||e the money
added on the |oan |s dec|ared |||eg|t|mate S|nce th|s add|t|on of money was a we|| known system
therefore the uran does not exped|te the word k|ba's den|t|on and s|mp|y orders to refra|n from |t

Usury system of preIs|am ca||ed k|ba a| Iah|||yya wh|ch |s be|ng proh|b|ted by uran as exp|a|ned by
Mau|ana Abu| A|a Maudood| |n h|s book "Sood" was the system of |end|ng the money for a xed
per|od and co||ect|ng w|th add|t|on at the end of the per|od If the borrower cou|d not pay the per|od
used to be |ncreased w|th certa|n |ncrease on the cap|ta| amount 1he add|t|on used to be taken a|so
on the pr|ce of goods so|d |f the buyer wou|d not pay net If he wou|d buy on cred|t the pr|ce wou|d
be |ncreased Cn the matur|ty of the agreement |f the buyer was st||| unab|e to pay the actua| cost of
the goods wou|d be |ncreased further

1he trader buys goods adds h|s prot to the cost and se||s them out 1h|s |ncrement |s h|s prot
wh|ch |s a return of h|s hard work and r|sk tak|ng e |s so|e|y respons|b|e for the prot or |oss and he
has to be respons|b|e for a|| the ||ab|||t|es thereafter 1herefore th|s k|nd of |ncrement |s perfect|y
|eg|t|mate Cn the other s|de the |ender g|ves the money and takes back w|th add|t|on 1h|s add|t|on
|s h|s |nterest wh|ch |s a return of the t|me ||m|t he g|ves to the borrower 1he r|sk |s not on the s|de of
the |ender as h|s return |s guaranteed e |s not respons|b|e for any |oss or ||ab|||ty ne|ther he |s
ob||ged to share |t 1herefore th|s k|nd of |ncrement |s araam

1hus the den|t|on of the k|ba |n the words of Mau|ana Maudood| page 139 |s that
1he xed |ncrease on the cap|ta| co||ected aga|nst a xed per|od 1here are three |ngred|ents of the
k|ba
1 Add|t|on |n the pr|nc|pa| amount or cap|ta|
2 Increment to the add|t|ona| amount xed |n advance
3 1he dea||ng made cond|t|ona| to the two ment|oned c|auses

1hus any dea||ng of |end|ng money wh|ch |nvo|ves the above three cond|t|ons |s a dea||ng of k|ba
|rrespect|ve of |ts usage whether |t |s used for a usefu| purpose or for a persona| need or e|ther
borrower |s r|ch or poor
1he quest|on ar|ses does the g|ven den|t|on t appropr|ate|y on the ||fe |nsurance? Let us ana|yse
Cne Increase |n the pr|nc|pa| amount LS |n the case of L|fe |nsurance but No |n the case of
Genera| or Med|ca| |nsurance
1wo Sum of the add|t|ona| amount xed |n advance No
1hree 1he dea||ng made cond|t|ona| to the above two No

I|rst|y |t |s true that the pr|nc|p|e amount |ncreases at the end of the matur|ty 8ut |t |s not necessary
If he d|es or meets the acc|dent before he pays |n fu|| he st||| gets the amount |nsured wh|ch he
actua||y had not pa|d

Second|y the ||fe |nsurance contract |s not a contract of |oan transact|on It |s buy|ng and se|||ng of
secur|ty and assurance respect|ve|y 1he 2nd party |e |nsurer |nvests the po||cy ho|der's money and
when |t y|e|ds prot shares |t w|th the po||cy ho|der 1he tota| sum of the add|t|ona| amount too |s
not xed |n the ||fe |nsurance Depend|ng upon the prots the |nsurer dec|ares the d|v|dends at the
end of the year In the cases of |nterest based |end|ng and borrow|ng the borrower pays back on|y
that amount wh|ch he borrowed |n add|t|on to the agreed |nterest 8ut |n the ||fe |nsurance once the
|nsured enters |nto an agreement and d|es very next day the |nsurer pays to the dependants of the
po||cyho|der the sum assured wh|ch |s many t|mes h|gher than the amount he actua||y pa|d so far
eop|e take prem|um and |oan as synonymous 1h|s |s the root of many m|sconcept|ons
Ior examp|e a man |nsures h|mse|f for S |akhs kupees on a 20 year prem|um contract and pays on|y
20 thousand kupees and d|es the very next day |n an acc|dent If |t were a |oan h|s fam||y deserves
on|y 20 thousand kupees p|us the |nterest wh|ch can never be more than few hundred kupees at any
exorb|tant rate 8ut |n L|fe Insurance the dependants get S |akh kupees p|us the prem|um the
deceased had pa|d a|ong w|th the bonus]prot 1herefore the ||fe |nsurance |s ne|ther a |oan contract
nor the excess amount pa|d to h|s fam||y |s |nterest 1h|s |s ca||ed the compensat|on for wh|ch the
|nsured had made the agreement

1he th|rd reason|ng too does not app|y to the ||fe |nsurance It takes p|ace |n bank's xed depos|ts but
not |n |nsurance 1he |nsurance c|a|m |s not sub[ected to the t|me per|od but the occurrence of certa|n
event

Mau|ana Maudood| has d|scussed the sub[ect of usury |n deta|| |n a th|ck vo|ume wh|ch |s worth
study|ng e r|ght|y says that |f the Is|am|c system of economy ex|sts the ||fe |nsurance becomes
|ntegra| part of the 8a|tu| Maa| 8ut how when and where that system w||| be estab||shed and what
the ord|nary Mus||ms wou|d do to cover the|r nanc|a| |osses by that t|me these quest|ons are not
answered