Riba (Interest/Usury)

Part 1 of the series of 3

The Holy Qur’ân states:

"O! you who believe, fear Allah and give up what remains of your demand for usury, if you are indeed believers. But if you do not (abstain) take notice of war from Allah and His Apostle…"

(Surah Al Baqarah, Ayah 279)

Nabî has said:

On the night of Meraj, when we reached the seventh Heaven I looked above me. Suddenly I heard the sound of thunder and lightning. Then I came to a group of people whose bellies/stomachs were as big as houses, in which there were snakes which could be seen from the outside. I asked Jibraeel u "Who are these people?" He replied "People who consumed interest."

(Ibn Majah)

Your queries on Riba answered…

Public Utilities

As far as the issue of building public toilets, pathways and roads with Riba is concerned, it will NOT be permissible to utilise interest funds for these projects. Although SOME Ulama do give permission for utilising interest in such communal projects, caution dictates against it and that is why many prominent Muftis of the Indo-Pak subcontinent prohibit it. The reason is obvious, that the Fuqâhâ state that the fundamental principle in disposing of Harâm funds is that such funds are "Wajibut-Tasadduq", i.e. they have to be given into the ownership of a deserving poor Muslim recipient without any intention of reward. By utilising such funds on toilet blocks or roads, NO poor person is being literally made the owner of these funds. Secondly, all people, rich and poor will be deriving benefit from the toilets, roads or the facility etc. that has been brought into existence with Harâm funds. Thus, to fund such projects with interest money will NOT be permitted.

School Fees

Paying school fees with interest money will also be prohibited. One should educate one’s child with "clean" money and not with filth such as interest. Yes, if however, someone gives his interest to deserving poor Muslim parents who are eligible recipients of Zakât (hence also eligible for accepting interest), and those parents in turn utilise that interest to pay their children’s school fees, that will be permitted. But for rich parents to do so, will NOT be allowed.

Part 2 of the series of 3

"Allah will deprive usury of all blessings but will increase for deeds of charity, for He loves not creatures ungrateful and wicked"

(Surah Al-Baqarah 2, Ayah 276)

Abdullâh bin Mas’ûd (RA) states:

When zina (adultery/fornication) and Riba (interest) become rife in a certain city or town, Allâh Ta‘âla announces the destruction of that city/town. (Hâkim)

Your queries on Riba answsered…

What to Do
with Riba Money

As Riba is a Harâm form of income, it will be disposed of in the same manner as the other Harâm, ill-gotten funds. The Fuqâhâ (Jurists of Islâm) state that the fundamental principle in disposing of Harâm funds is that such funds are "Waajibut-Tasadduq", i.e. they have to be given into the ownership of deserving poor Muslim recipients without any intention of reward. Riba money will thus be disposed of without any intention of gaining reward, to those needy Muslims who are eligible to receive Zakât.

Fines

As the above method is the ONLY way of getting rid of Riba, it will NOT be permissible to utilise such funds for the payment of traffic fines. Traffic Laws are put into place for one’s own safety. By applying for and obtaining a driver’s licence, then in principle, one indirectly pledges to obey such laws. When a contravention of a Traffic Law takes place and one is charged a fine, one has the option of either admitting guilt by paying the fine. Or facing prosecution with a jail term. The essence of the traffic fine is then a form of ransom money for deliverance from an impending jail term. Thus, by paying the fine, one is deriving the benefit of being saved from going to jail. By paying traffic fines with Riba, a rich person will also be benefitting from Harâm funds, in spite of NOT being eligible of doing so. Hence, this will NOT be permissible. Granting permission for paying traffic fines with Riba further has the added implication of Muslims deliberately starting to bank on interest, just so that they may acquire interest money to pay their fines. Apart from this, it will lead to a flagrant disregard for Traffic Laws and consequently a disregard for the safety of human lives on our roads.

Income Tax

If a government imposes an oppressive tax on its citizens, then yes, it will be permissible for one to pay such taxes with interest money, PROVIDED that the interest has been acquired from a GOVERNMENTAL banking institution, such as for instance, the Reserve Bank or the Post Office. The reason why this would be permissible is that one is returning the interest to the SAME source from where it was derived. In other words, the interest was acquired from the government and is being returned also to the government, albeit in the guise of taxes. However, this ruling does not now give one the permission to deliberately start banking on interest with the Post Office solely for the purpose of gaining interest to pay such taxes, because to intentionally initiate an interest transaction is in itself a sin. Yes, if one already HAD such interest lying in the Post Office savings account and that is utilised for paying such taxes, it will be in order. However, as soon as one uses up the interest (either by disposing of it to the poor or paying oppressive taxes), one will also be required to shut down that Post Office interest-bearing account, because continuing such an interest-bearing transaction is a transgression on its own.

However, interest derived from Commercial Banks where most people generally do their banking, CANNOT be used to pay ANY taxes to the government (whether it be income-tax or whatever), because in this case, the interest is NOT being returned to the SAME source from where it was accrued. The Commercial Banks are private institutions, whereas tax is paid to the government.

Part 3 of the series of 3

The Holy Qur’ân states:

"Those who devour usury will not stand except as one who stands driven to madness by the touch of the devil. That is because they say: Trade is like usury, but Allah has permitted trade and forbidden usury. Those who after receiving direction from the Lord, desist, shall be pardoned for the past; their case is for Allah (to judge); but those who repeat (the offence) are the companions of the fire; they will abide therein (forever).

(Surah Al-Baqarah, Ayah 275)

Nabî once narrated a lengthy dream of his to the Sahâba. One of the things Nabî saw was a river. Nabî mentions that the river was red like blood. A person was swimming in this river. Another person was standing on the bank of the river. He had gathered many stories next to him. When the swimmer would approach the bank of the river the latter would throw a stone into his mouth. The swimmer would then drift away into the river. The swimmer once again returned and the same procedure was repeated. Nabî says: I asked my companions (i.e. angels) about these people. They later told me that the person who was swimming in the river (of blood) in whose mouth stones were thrown is the person that consumed interest.

(Bukhari Sharif)

Your queries on Riba answered…

Shar’î Ruling

It becomes permissible to accept interest when one is in dire straits and in a financial predicament of such nature that makes one eligible of accepting Zakât. Once a person becomes an eligible recipient of Zakât, he also becomes eligible for accepting interest. However, such Zakât and interest should ONLY be used to the extent that it pulls him out of his financial predicament, in other words, it should NOT become a habit. As far as GIVING interest is concerned, if one has interest funds lying around, one should get rid of it as soon as possible by GIVING it to those Muslims who are eligible recipients of Zakât funds. When giving such interest, it should be given away WITHOUT any intention of receiving reward.

NO, it is NOT permissible to lend money to someone with the motive of getting back MORE than the amount that was lent. Any amount that is in excess of the original loan, falls under the category of Riba (interest) and will thus be Harâm. Thus, one will only be allowed to request and retrieve the original amount that was lent out without asking for or expecting to be paid back even a cent more in return.

AND ALLÂH KNOWS BEST.

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