RIBA IN ISLAM

INTRODUCTION

RIBA is an Islamic term for usury or interest, and it is prohibited in Islam. According to Islamic Law, it is forbidden for a Muslim to earn or pay any interest on loans or other financial transactions. This prohibition is based on the belief that money should not be used to make a profit, as it is seen as a form of exploitation. Instead, Muslims are encouraged to engage in trading, donations, and other forms of charity as a means of earning money. RIBA is considered haram in Islam because it is considered to be a form of usury, which is forbidden in Islamic law. Riba is defined as "any increase over and above the principal" in a loan or debt, which means that any loan or debt that carries interest is considered haram. This is based on the Quranic verse 2:275 which states that "God has permitted trade, but forbidden usury."

WHAT THE QURAN SAYS ABOUT RIBA

The Qur'an prohibits the charging of Riba, and there are several verses in the Qur'an that deal with this topic. Here are some examples:

1."Those who consume interest cannot stand [on the Day of Resurrection] except as one stands who is being beaten by Satan into insanity. That is because they say, "Trade is [just] like interest." But Allah has permitted trade and has forbidden interest." (Qur'an 2:275)

This verse from the Quran, specifically verse 2:275, is a clear statement that Riba (usury or interest) is strictly prohibited in Islam. It highlights the severity of the prohibition by stating that those who consume interest (i.e. those who charge or pay interest) will not be able to stand on the Day of Resurrection, except as someone who is being beaten by Satan into insanity.

The verse goes on to explain that some people justify charging interest by claiming that it is the same as trade, but this is not the case. Allah has permitted trade and commerce, which involves the exchange of goods and services for their equivalent value, but He has strictly forbidden Riba, which involves the charging of extra or unfair amounts of money in exchange for the use of money or credit.

The verse, therefore, emphasizes the importance of conducting business and financial transactions in a fair and just manner, and it serves as a reminder to Muslims that they should avoid engaging in any practices that are considered Riba.

2."O you who have believed, fear Allah and give up what remains [due to you] of interest, if you should be believers. And if you do not, then be informed of a war [against you] from Allah and His Messenger." (Qur'an 2:278-279)

This verse from the Quran, specifically verses 2:278-279, instructs the believers to give up any interest that may still be owed to them and to avoid charging interest in the future. The verse begins with the address to the believers, encouraging them to fear Allah and to give up the remaining amount of interest that they are owed, indicating that they should seek to rectify any past mistakes related to charging or taking interest.

The verse then warns that if the believers do not give up the interest that they are owed, they should be informed of a war against them from Allah and His Messenger. This warning is significant, as it highlights the severity of the prohibition of Riba in Islam, and serves as a reminder that believers should avoid any practices that are considered Riba.

The verse also reinforces the concept that financial dealings and transactions should be conducted in a just and equitable manner, and that any form of exploitation or unfair practices, such as charging interest, will be punished by Allah. Therefore, this verse serves as an admonition to the believers to remain mindful of their financial dealings and to ensure that they conduct them in a way that is in accordance with the teachings of Islam.

3."And for their taking of interest while they were forbidden from it and their consuming of the people's wealth unjustly. And we have prepared for the disbelievers among them a painful punishment." (Qur'an 4:161)

This verse from the Quran, specifically verse 4:161, speaks about the taking of Riba (usury or interest) and its consequences. The verse refers to a group of people who were forbidden from taking interest, yet continued to consume it and unjustly take the wealth of others.

The verse describes the punishment that awaits those who engage in such practices, stating that a painful punishment has been prepared for the disbelievers among them. This highlights the severity of engaging in the practice of Riba and emphasizes that such actions are considered not only unjust but also against the teachings of Islam.

The verse serves as a warning to believers that any form of exploitation or taking of unjust interest will be punished by Allah. It also reinforces the importance of conducting financial transactions in a just and equitable manner, and treating the wealth of others with respect and fairness.

Therefore, the verse emphasizes the seriousness of the prohibition of Riba in Islam, and serves as a reminder to Muslims to act with honesty and integrity in their financial dealings, and to avoid any practices that are considered Riba.

4."Those who believe and do righteous deeds and establish prayer and give zakah will have their reward with their Lord, and there will be no fear concerning them, nor will they grieve." (Qur'an 2:277)

This verse from the Quran, specifically verse 2:277, highlights the importance of faith, good deeds, and righteous conduct in Islam. The verse emphasizes that those who believe in Allah and His message, and who do good deeds by establishing prayer and giving zakah (obligatory charity), will be rewarded by their Lord.

The verse assures that those who believe and act righteously will have nothing to fear and nothing to grieve, indicating that they will be granted security and peace in this life and the hereafter. This is a promise of security and comfort that comes with the practice of faith and good deeds.

The verse also serves as a reminder to Muslims that faith is not just a matter of belief, but it also requires action, including the establishment of regular prayer and the giving of zakah, which is one of the pillars of Islam. This reinforces the importance of fulfilling one's religious obligations and engaging in righteous deeds.

Therefore, the verse encourages believers to seek the pleasure of Allah through good deeds and virtuous conduct, and it reassures them that their efforts will be rewarded by their Lord with security and peace in this life and the hereafter.

These verses emphasize the seriousness of charging interest and warn of the consequences of doing so. They also encourage believers to engage in lawful business and trade and to be mindful of their obligations to Allah and to their fellow human beings.

CONCLUSION: PROPHET MUHAMMED (PBUH) ON RIBA

Prophet Muhammad (peace be upon him) delivered his last sermon during the Hajj pilgrimage on the ninth day of the Islamic month of Dhu al-Hijjah in the tenth year after the Hijra (the migration from Makkah to Medina). In this sermon, he emphasized a number of important teachings, including the prohibition of Riba.

Prophet Muhammad (peace be upon him) warned his followers about the evils of Riba and stated that it should be avoided at all costs. He said: "Allah has forbidden you to take usury (riba), therefore all riba obligations shall henceforth be waived. Your capital is yours to keep. You will neither inflict nor suffer any inequity."

In his last sermon, Prophet Muhammad (peace be upon him) also emphasized the importance of treating all people with kindness and respect, regardless of their race or social status. He encouraged his followers to be just and to treat others fairly, and he urged them to avoid any form of injustice or exploitation, including the charging of Riba.

Therefore, the last sermon of Prophet Muhammad (peace be upon him) is considered a comprehensive statement of Islamic principles and teachings, and it highlights the importance of avoiding the practice of Riba and conducting financial transactions in a just and equitable manner.