Saturday, 28 November 2015

Which type of Riba is Al-riba?


A Brief Description of the Question: 
RIBA – A POINT OF VIEW Riba in Arabic literally means increase, gain or profit. Nowhere in Quran Riba is prohibited. Quran, however, prohibits Al-Riba (2:275). This is a proper noun pointing out to a particular form of Riba. To know the pertinence/context of the term Al-Riba. We may examine a couple of verses adjoining the verse prohibiting Al-Riba. Reading verse 2:272 to 2:280 we find that the issue discussed in these verses is, helping the poor deserving charity.
The Answer: 
Riba (interest) is an Islamic law term which has the meanings of increasing, multiplying, inflating, developing, attaining and during interchange agreements, a gratuitous excess, which is accepted as the right of one part (from two parts) and laid down as a condition during the agreement. The word “riba” being an infinitive in Arabic, etymologically, means “absolute increasing”. 

When two things which are the same kind and amount are exchanged, the extra amount for one party is called “riba” or “interest” (Ibnul-Human, Fathul-Qadir, V, 227) 
such as exchanging 100 gr. gold for the same carat of 120 gr. gold in cash or forward... In such a procedure, one who gives 100 gr. gold has to take the same amount of gold. Here, if the 100 gr. gold is capital (ra’sul mal), and the 20 gr. is excess, that excess is called “riba” (Elmalılı, Hak Dini Kur’an Dili,II, 952,953).


In Turkish, instead of the word of “riba”, the word of “faiz” (interest) is used. That word has the meanings such as overflowing, overflow, full and the profit taken in return for the given money. Elmalılı Hamdi Yazır when explaining that “riba” and “faiz” have the same meanings; says the following: The word “riba”, in the dictionary, is translated as “increasing” and “inflating”, so it assumed the meaning of “particular excess” what we call “faiz”.


In the Era of Ignorance (the pre-Islamic era), the main debt was called “ra’sul mal”, and the excess as “riba”. Today’s interest procedures, in respect of qualification, are no different than those of the pre Islamic era. 
Decreasing or increasing the interest amounts or types, from time to time, does not change the attribute of that act. So, the interest in the pre Islamic era customs is exactly the same as what is called “faiz” or “nama” today (both words have the meaning of “interest”). 
Doubtlessly, in dictionary its most suitable name should be “riba”, “the excess” or “the left”. The reason, why it is used as “faiz” or “nama”, is because of misunderstanding the verse "Trade is like usury" (Qur’an, Al-Baqarah, 2/275) and by comparing that verse to buying-selling and trading. (Elmalılı, ibid, II, 952,953).  


Unless an attribute of something changes, the change of the name does not change the decree about it. So, the decrees about “riba” are also used for “faiz” which has the same judicial features. This is like saying the “ijara agreement” (contract of employment in the Ottoman State) as “renting agreement” both of which have the same meanings. 

Islam, when solving the problems related to community about social and economical cases, has complied with the principle of “tadrij” (gradualism). Usury was an important way of earning money for Arabs especially for high-class people. It was not suitable to stop it at a bound. Thus, the prohibition of the “riba” underwent a gradual process just like the prohibiton of alcohol.  
Abu Hurayra narrated the following from Hazrat Prophet: “The night of miraj (Our Prophet Muhammad’s ascension), I came across with a crowd whose stomachs were as large as houses. There were snakes, visible from outside in their stomachs. When I asked Gabriel (Jibril) (peace be upon him) who they were, he answered: ‘They are those who received interest.’”  (Ibn Majah, Tijarah, 58; Ahmad b. Hanbal, Musnad II, 353, 363). 

As the event of the Miraj occurred around the year 621 (Gregorian calendar) in Makkah, it was pointed out then that interest would be prohibited in the future. It was stated in a verse that was revealed in Makkah that usury would not increase one’s property (Qur’an, Ar-Rum, 30/39). 

And in a verse revealed in Madinah, it is expressed that in the Torah, interest had been prohibited for Jews but because they did not comply with that prohibition, the things that were halal (permissible) for them had been made as haram (forbidden).(Qur’an, An-Nisaa, 4/160)

And with the following verse, partial prohibition was commanded:
“O you who believe! Devour not usury, doubled and multiplied; but fear Allah that you may (really) prosper.” (Qur’an, Aal-e-Imran, 3/130)

Here, with the word “usury”, “compound interest” is meant. The Qur’an, without any distinction between little and much interest, prohibits interest absolutely with these verses:
“Allah has permitted trade and forbidden usury” (Qur’an, Al-Baqarah, 2/275). but those who repeat (the offence) are companions of the Fire: they will abide therein (for ever) (Qur’an, Al-Baqarah, 2/275).

“O you who believe! Fear Allah, and give up what remains of your demand for usury, if ye are indeed believers. - If you do it not, take notice of war from Allah and His Messenger. But if you repent, you shall have your capital sums: Deal not unjustly, and you shall not be dealt with unjustly.” (Qur’an, Al-Baqarah, 2/278, 179)

According to most of the interpreters, the verses of interest were revealed because of the interest problem of the tribe of Bani Thaqif. The interest of assets and liabilities of that tribe had been abolished in the Taif agreement made with Hazrat Muhammad (pbuh).

There emerged hostility when the Sons of Muqhira did not pay their debts to the Sons of Umayr who were from Bani Thaqif. Hazrat Prophet was informed about the situation in writing by the governor of Makkah, Attab b. Asid (d. 13/634). 

Thereupon, the verses of interest were revealed and Hazrat Muhammad sent the related verse to the governor. In addition, our Prophet (pbuh) wrote to the governor, “if they accept that command, it is all right; otherwise, declare war against them”. Thereupon, the people of Taif gave up their demands. (At-Tabarî, Tafsir, 105, 106; Elmalılı, ibid, II, 972). 

The conquest of Makkah and Taif took place in the 8th and the last pilgrimage (hajj) in the 10th years of Hijra (Emigration). Hazrat Prophet started the prohibition of interest with the following words: Watch out! All of the usuries of the Era of Ignorance has been laid aside forever, and the first usury I begin with is that which is due to my father’s brother ‘Abbas ibn ‘Abd al-Muttalib.. (Muslim, Hajj, 147; AbuDawud, Buyu', 5).

The interest that Islam prohibits is divided into two parts. The interest of nasia and excess:
a. The interest of nasia (riban nasia): This is the kind that was known and carried out in the era of ignorance. This kind of interest is carried out in accordance with the time which occurs through sale contracts and by granting loans. If the debt is not paid in its deadline, an extra amount of interest is added through new contracts. In the Qur’an, that kind of interest is pointed out and is prohibited:
“O you who believe! Fear Allah, and give up what remains of your demand for usury, if ye are indeed believers. - If you do it not, take notice of war from Allah and His Messenger. But if you repent, you shall have your capital sums: Deal not unjustly, and you shall not be dealt with unjustly.” (Qur’an, Al-Baqarah, 2/278, 179)


b. The interest of excess (ribal fadl): This is what is mentioned in hadiths and means to sell the same kind of goods by declaring two prices such as exchanging one-scale-wheat for two-scale-wheat...    

From Ubada b. Samit, it was narrated that Hazrath Prophet said the following: “Gold with gold, silver with silver, wheat with wheat, barley with barley, date with date and salt with salt, can be exchanged equally and simultaneously. However, if their kinds are different, -as long as it is in cash- you can trade however you like.” (Muslim, Musaqat, 81; Abu Dawud, Buyu',18; Ahmad b. Hanbal, V, 314, 320). 
The hadith in the book of Tirmizi has the following addition: Whoever gives the excess amount or receives it during that exchange, it is certain that he will have committed interest.











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