Riba is commonly known as Usury or Interest.
Allah has sternly addressed Riba in the Quran with dire warnings to the believers:
O you who believe! Fear Allah and give up what remains (due to you) from riba (usury/interest – from now onward), if you are (really) believers. And if you do not do it, then prepare for war with Allah and his Messenger … Surah Al Baqarah, 2:278-9
Further Allah has addressed those who say “Its just business!” or “its profit, not interest!” by declaring:
"THOSE who gorge themselves on usury behave but as he might behave whom Satan has confounded with his touch; for they say, "Buying and selling is but a kind of usury" - the while Allah has made buying and selling lawful and usury unlawful. Hence, whoever becomes aware of his Sustainer's admonition, and thereupon desists [from usury], may keep his past gains, and it will be for Allah to judge him; but as for those who return to it -they are destined for the fire, therein to abide!" Surah Al Baqarah 2:275
Similarly Allah's Messenger has used equally strong language when addressing issues around riba, certainly in an effort to discourage believers from dealing with it:
“Abu Huraira reports that Allah's Messenger (S) said: Riba is of 70 different kinds, the least grave of it being equivalent to a man marrying (i.e sleeping) with his own mother.” (Ibn Majah, Baihaqi)
Abdullah ibn Hanzala reported that Allah's Messenger of Allah said: A dirham of riba, which a man receives knowingly is worse than committing zina (adultery) 36 times. (Ahmad)
Jabir reported that Allah's Messenger (S) cursed the acceptor of interest and its payer, and one who records it, and the two witnesses, and he said: They are all equal (in guilt). (Muslim)
What is Riba/Usury Exactly?
"O you who have attained to faith! Do not gorge yourselves on usury, doubling and re-doubling it - but remain conscious of God, so that you might attain to a happy state." Surah Ali-Imran 3:130
"And that which you put out in riba seeking increase (i.e profit) through the wealth of others, will not increase in the sight of Allah, whereas that which you give as charity; seeking Allah’s countenance; such will be blessed with multiple increase." Surah Ar Room 30:39
Some forms of riba are:
- Lending and borrowing on interest, or where a fixed rate of return is demanded/paid.
- Increasing the price of an article in consideration of deferred payment.
- Having someone artificially bid up the price in an auction to benefit from the higher selling price.
- Using deception to make a profit i.e by lying about the condition/quality of an article.
- Taking advantage of a buyers ignorance of the goods or market price
- Hoarding in order to affect prices.
- A monopoly which allows control over prices.
- The selling of debts.
- Speculative transactions i.e buying up goods etc anticipating that the price will rise to profit from selling it later.
- Options - paying a fee to buy something at an agreed price during a specified period.
- Bribery and corruption including using donations to influence and control people/institutions
- Pyramid schemes
What amount of interest is riba?
Anas bin Malik reported that Allah’s Messenger (s) said: If you give a man a loan and he were to offer you a meal, do not eat it because that would be riba, unless he used to invite you before. If you give a man a loan and he offers you a ride on his animal, do not take it because that is riba, unless he used to offer it before. Sunan Al Bayhaqi
Riba and the world today
All around the world today, riba has taken control of the economies of countries through institutions such as the IMF and World Bank. Further all privately owned Central Banks lend money from the Bank of International Settlements.
All local banks in turn lend money from the Central Bank. ANY bank which provides loans on interest feeds this global system.
Global effects of riba in recent history
The creation of Zionist Israel was sponsored by the Rothschild banking family through the Balfour Declaration. Further generations of this banking family bequeathed the construction of universities and the parliament house. This family also created the first Central Bank - The Bank of England, which funded the large scale colonisation of the earth by Imperial Britain. The last Khilafah of the Ottoman Islamic Empire was destroyed in 1923 by first issuing it huge loans at seemingly low rates, which was impossible for it to repay.
Local effects of riba
- Inflation. Although commonly presented as an increase in prices, is really a devaluation of paper money. This devaluation is often caused by banks issuing loans and hence flooding the market with more money.
- Increasing poverty and destitution caused by rising prices (Inflation caused by devaluing money). Abu Hurairah reported that Allah’s Messenger said: A time will come over mankind when not a single person will remain who does not consume riba and if one does not consume it, the vapour or dust of it will reach him. Ahmad, Abu Daud, Nasai, Ibn Majah
What can I do?
Seek Allah’s help to:
- Get out of Debt and Stay out of debt - avoid interest based loans and credit.
- Pay off existing debts and do not take out new debt.
- Minimise the use of banks and banking, remember most Islamic Banks simply provide Riba through the back door!
- Keep savings out of banks and in commodities such as gold, silver, property.
- Help others to settle their debt.
- Help others with interest free loans.
- Raise awareness about riba in Islam and the dangers of Riba.
- Plant, Reuse, repair and recycle, live a simple life.
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