Dr.
Farooq's Study Resource Page
Riba
Courtesy: H.A.R. Gibb and J. H.
Kramer. Concise Encyclopedia of Islam [Brill, 2001], pp. 471-473.
RIBA (A.), lit. increase, as a technical term, usury and interest, and in
general any unjustified increase of capital for which no compensation is
given. Derivatives from the same root are used in other Semitic languages to
describe interest.
I. Transactions with a fixed time limit and payment of in west a well as speculations
of all kinds formed an essential element in the highly developed trading
system of Mecca (cf, Lammens, La Mtcque la veille de l'hegire, p.
139 sqq., 155 sqq., 213 sq.). Among the details given by the
Muslim sources we may believe at least the statement that a debtor who could
not repay the capital (money or goods) with the accumulated interest at the
time it fell due, was given an extension of time in which to pay, but at the
same time the sum due was doubled. This is clearly referred to in two passages
in the Kur’an (Sura iii. 130; xxx. 39) and is in keeping with a still usual
practice. As early as Sura xxx 39 of the third Meccan period (on the dating
ct. Ndieke-Schwally, Geschichte des Qorans, i.} the Kur’an contrast
riba with the obligation to pay what but without directly forbidding it:
"What ever ye give in usury to gain interest from men's substance shall
not bear interest with Allah, but what ye given as zakat in seeking the
face of Allah, These shall gain double". The express prohibition follows
in Sura iii. 130 (Madina, obviously earlier the following passage):
"Believers, devour not the rjba with continual doubling; fear God perhaps
it will go wet with you". This prohibition had to be intensified in Sura
ii. 275-280 (evidently of the earlier Madinese period; cf. on the following
message): "Those who devour riba shall only rise again as one whom Satan
strikes with his touch; this because they say, 'selling is like usury'; but
Allah has permitted selling and forbidden usury he therefore who receives a
warning from his Lord and abstains shall have pardon for what is past his and
his affairs is with Allah; but they who relapse usury, are the people of Hell,
they shall remain in it for ever. Allah abolishes usury and makes alms bring
interest; Allah loveth no sinful unbeliever. . . . believers, fear Allah and
remit the balance of the riba if ye be believers. But if ye do not, be
prepared for war from Allah and his apostle. If ye repent ye shall receive
your capital without doing an injustice or suffering injustice. If any one is
in difficulty, let there be a delay till he is able to pay, but it is better
for you to remit if ye be wise". To evade the dogmatic difficulty, of an
eternal punishment for the of a believer, the passage in question has been
interpreted (already presupposed in Tabari) to mean that by relapse is meant
the holding lawful and not taking of interest; in any case the Kur’an
rewards riba as a practice of unbelievers and demands as a test of belief that
it should be abandoned. It comes up again in Sura iv. 161 (of the period
between the end or the year 3 and the end of the year 5; this also gives a
clue to the date of the preceding message) in a passage which sums up the
reproaches swelled against the Jews: "and because they take riba while it
was forbidden them, and devour usury the substance of the people". The
fact that the principal passages against interest belong to the Madina period
and that the Jews are reproached with breaking the prohibition suggests that
the Muslim prohibition of riba owes less to conditions in Mecca than to the
Prophet's closer acquaintance with Jewish doctrine and practice in Madina. In
the later development of the teaching on the subject as we find it in
tradition, Jewish influence is in any case un. deniable (c!. Juynboll, Harulleiding;
p. 286).
2.
The traditions give varying answers to the question what forms of business
come under the Kur’anic prohibition of riba, none of which can be regarded
as authentic. The ignorance of the correct interpretation is emphasized in a
tendencious tradition, obviously put into circulation by interested
individuals (the tradition is probably older than Lammens, op. ,it., p.
214, thinks); according to this view, the principal passage in Sura ii. is the
latest in the whole Kur’an, which the Prophet could not expound before his
death. That the rigid prohibition of usury in Muhammadan law only developed
gradually is clear from many traditions. Alongside of the view repeatedly
expressed, but also challenged, that riba consists only ill (the increase of
substance in) a business agreement with a fixed period (nasi'a, nazira,
!lain) we have the still more distinct statement that there is no riba if
the transfer of ownership takes place immediately (yadun bi-yad). But
even in arrangements with a time limit, a number of traditions pre-suppose a
general ignorance of the later restrictions; {or example we are told that in
Basra under Ziyad gold was sold on credit for silver (this may have an anti-Umaiyad
bias - cf. below on Muawiya -, but it is illuminating); but at a later dale
such forms of the traditions against riba were to some extent dropped. What
was generally understood in the earliest period as the riba forbidden in the
Kur'an, seems only to have been interest on loans (chiefly of money and
foodstuffs); anything that goes beyond this is to be regarded as a later
development. The reason for such prohibitions is at different time; said to be
the fear of riba and sometimes we have underlying the recognition that there
is no tradition of the Prophet relating to this. This is also expressed in the
form that nine- tenths of the permitted is renounced or that riba was
conceived as going as far as ten times the capital. The view which later
became authoritative is laid down in a group of traditions of which one
characteristic example is as follows: "gold for gold, silver for silver,
what for wheat, barley for barley, dates for dates, salt for salt, the same
thing for the same thing, like for like, measure for measure; but if these
things are different, sell them as you please if it is (only) done measure for
measure", Another common tradition expressly forbids the exchange of
different quantities of the same thing but of different quality (cf. below).
Other traditions demand equality of quantity even in the sale of manufactured
precious metals, This last case seems to have been especially discussed, and
on more than one occasion Mu'awiya appears as champion of the opposite view
and practice {this again has a distinctly anti-Umaiyad bias). Particularly
conscientious people went even further in their limitation of riba than the generality
and would only exchange wheat for barley in equal quantities. Still stricter
was the view that the exchange of even the same quantities of the same thing,
especially of precious metals, was riba, This view must be older than a
difference from the usual opinion (e.g. Muslim, Bab baj' al-lt'am mithlan
bi. mithl), which is based on the secondary interpretation of an already
recognized tradition, which obviously only forbade the exchange of different
quantities [end of page 471]of the same thing
but of different quality (ct. above). This same general prohibition of
exchange is also given for dates. The question whether one I party to an
agreement can voluntarily give the other a
bonus, is denied for an exchange, but affirmed for i a loan- The reduction of
the amount of the debt if the
loan is voluntarily paid before it fans due. is sometimes approved as the
opposite of riba:, some- ' times disapproved, sometimes forbidden as being i
equivalent to riba; in any case it Is clear that the practice existed. On the
sale of an animal for an animal on credit, opinion is also not unanimous.
Numerous
traditions forbid riba without defining it more closely; the Prophet is said
to have uttered this prohibition at his farewell pilgrimage (scarcely
historical). Riba is one of the gravest sins. Even the least of its many forms
is as bad as incest and so on. All who take part in a transaction involving
riba are cursed, the guilty are threatened with hell, various kind of
punishment are described; in this world also gains from riba will bring no
good. In spite or all this tradition foresees that riba will prevail.
In
connection with riba tradition mentions various antiquated forms of sale of
special kinds, like muhakala, mukhbara. muzaabana etc., which concern
the exchange of different stages In the manufacture or development of the same
thing, or of different qualities, and which are forbidden: an exception is
made, obviously because of it, undeniable practical and social necessity, of
what Is known as 'ariya (plur. 'araya), fresh dates on trees
intended to be eaten, which it is permitted to exchange in small quantities
for dried dates.
3.
While the existence of the Kur’anic prohibition of riba has never
been doubted, the difference of opinion that finds expression in tradition
regarding the relevant facts is continued in the earliest stage of development
of Muhammadan law. Unanimity prevails regarding tile main lines of the
limitations to be imposed upon the exchange of goods capable of riba (mal
ribawi); it is only permitted if transfer of ownership takes place at once
and, so far as goods of the same kind arc concerned, only in equal quantities.
In the case of a loan it is forbidden to make a condition that a larger
quantity shall be returned without regard to the kind of article. Gold and
silver are generally regarded as mal ribawi (only quite exceptionally
are coins of small denomination included). All the greater are the differences
Of opinion as to what things outside of the precious metals are liable
to the riba ordinances. In isolated cases one still finds views that show
themselves uninfluenced in principle by the authoritative group of traditions
(ct. above). e.g. when everything realisable is subjected to the riba
ordinances (Ibn Kaisan) or all business dealing in things of the same
kind (Ibn Sirin Hammad) or when everything liable to zakat is considered
capable of riba (Rabia b. 'Abd al-Rahman). Other opinions differ in the
treatment of property capable of riba from that group of traditions, although
it is not known what they understand by this; possibly if at an exchange of
the same kind of thing not equality of quantity but equality of value in two
quantities is demanded (Hasan al-Basri) equality of quantity also in the exchange
of different kinds apparently within a limited circle of goods capable of riba
(Sa'id b. Djubair). The old interpretation that there is no riba if the
transfer of possession takes place at once is ascribed to 'Ata.' and the
jurists of Madina. The views of most authorities however and in particular
those which survive later in the Jaw schools assume the literal acceptance of
the text of that group of traditions and differ only in its Interpretation.
Thus there are mentioned as precursors of the later Zahiri doctrine: Tawus,
Masruk, al-Sha’bi, Katada, ‘Uthman al-Batti.; as precursors of the Hanafi
view: al-Zuhri al-Hakam, Hammad (cf. however above), Sufyan al-Thawri; as
precursors of the earlier view of al-Shafi'i; Sa'id b. al-Musaiyib and others
as precursors of his later view: al-Zuhri (ct. however above) and Yahya b.
Sa'id. On the questions whether It loan can be repaid In another kind and what
is to be done if defects are revealed in an exchange of mal ribawi after
it has changed hands, there are old differences of opinion.
4.
In the above mentioned group of traditions the following goods in addition to
gold and silver are expressly mentioned as bearing the prohibition of riba at
their exchange: wheat, barley, dates and salt (sometimes also raisins, butter
and oil). The Zahiris, as a result of their refusal on principle to accept
analogy (kiyas) assume that the prohibition applies only to the six things
especially named (the other kinds are rejected as not well attested). The
other schools of law, on the other hand, consider the kinds mentioned in
tradition only as examples of the variety of things that come under mal
ribawi, but differ from one another in their lists of these things.
According to the Hanafis and Zaidis (also al-Awza’i). gold and silver
represent examples of the class of things defined by weight (mawzan) and
the four other things those sold by measure (makil). The lmami teaching is
practically the same. According to the Malikis and Shafi'is, gold and silv6r
represent the class of precious metals and the four other things the class of
foodstuffs; the latter, in the Maliki view, including actual estables so far
as they can be preserved according to the older view of al-Shafi'i, provisions
which are sold by weight and measure; according to his later view, which is
also that of his school, foodstuffs without any qualification. The teaching of
the Hanbalis corresponds to that of the Hanafis; as regards the "four
kinds", two further opinions of Ahmad b. Hanbal are handed down which
correspond to the two views held by al-Shafi'i. In these, wheat and barley are
regarded as two different kinds by the Hanafis, the Shafi’i and the
better known tradition of the Hanbalis (as well as Zahirls, Zaidis and Imamis);
as one kind according to the Hanbalis (also according to al-Laith b. Sa'd and
al-Awzai). The Hanafis and the Imamis, in contrast to the other schools, are
content, in so far as It is not a question of the exchange of precious metals,
with fixing the quantities, and do not demand actual change of ownership
during the negotiation (madilis). The Zahiris, in the strict
interpretation of the text of one tradition, in every case demand a change of
ownership in the fullest sense at once. The sale of fresh dates for dried
dates is forbidden by all schools except the Hanafis on the authority of one
tradition, the barter of ‘arayion the other hand is not permitted by
the Hanafls but regulated by the other schools. without any uniformity; as
regards exchange of the same material in different stages of manufacture there
are many differences of opinion. As regards the exchange If goods of the same
kind which are not mal ribawl the difference of quantity is generally
permitted postponement (nasi>a,
nasa’) of the single pay still forbidden by the Hanafis and Zaidls but
permitted by the other schools (with differences in detail). At the sale of
wares, also of those which are [end of page 472] mal
ribawi, for precious metal, the payment at later date (salam) and
sale on credit (bai' al-'ina) with postponement of both sides of the
transaction is regarded on the authority of a tradition as entirely forbidden
in all agreements regarding sale or exchange.
5. The prohibition of riba plays a
considerable part in the system of Muhammadan law.
The structure of the greater part of the law of contract is explained
by the endeavour to enforce prohibition of riba and maisir (i.e. risk; q.v.)
to the last detail of the law (Bergstrasser, in lsl., xiv. 79). Riba in a loan
exists not only when one insists upon the repayment of a larger quantity but
if any advantage at all is demanded. Therefore
even exchange (suftadia) is sometimes disapproved (as by the Hanafis),
sometimes actually forbidden (as by the Shafi’is) because the vendor, who is
regarded as the creditor, reaps the advantage of avoiding cost of transport.
This did not prevent the wide spread of this arrangement in the Arabic middle
ages and its influence upon European money-changing.
But they were always conscious that a direct breach of the prohibition
of riba was a deadly sin. Pious Muslims to this day therefore not infrequently
refuse to take bank interest. The importance of the prohibition of riba on the
one hand deeply affecting everyday life and the requirements of commerce on
the other have given rise to a number of methods of evasion. Against some of
these there is nothing formally to object from the standpoint of the law; they
are therefore given in many law books and expressly said to be permitted. The
Shafi’is, the later Hanafis and the Imamis have recognized such methods of
evasion while the Malikis, the Hanbalis and the Zaidis reject them. The
recognition of these methods of evasion is not contrary to the strict
enforcement of the prohibition in the fikh. The inner significance of
decrees of the divine law naturally cannot be understood by the mind of man.
This is shown in the case of riba in the limitation to certain kinds of goods.
The Zahiris are thus among the most energetic defenders of evasions of
the prohibition of riba. Their line of argument is based not only on their
formal negative rejection of deduction by analogy but also upon their
positive estimation of the intention underlying the evasions. One of the
oldest transactions of the kind, against which several traditions are already
directed is the double contract of sale (from one of its
elements it is called bait al-'ina, credit sale par excellence): One
sells to someone who wants to lend money at interest something against the
total sum of capital and interest which are to be due at a fixed date,
and at the same time buys the article back for the capital which is at once
handed over. This transaction was taken over in mediaeval Europe under the
name of mohatra (from the Ar. mukhatara; cf. Juynboll, Handleiding,
p. 289, note I,
and E. Bussi, in Rivista di storia del diritto italiano, v., part 2).
Another method of evasion consists of handing over to the creditor the
use of a thing as interest by a. fictitious agreement to sell or to pledge.
All these practices are still in use and in spite of the prohibition of
riba money-lending is a flourishing business in roost Muslim countries (50% is
Often regarded as moderate interest).
Bibliography:
On the traditions ct. in addition to the references in Wensinck, Handbook
s.v, Usury, especially the collection of material in Kanz al- ‘ummal,
ii. No. 4623 sqq., 4951 sqq. The material of tradition is
dealt with from the point of view of the respective authors in Ibn Hazm,
al-Muhalla, No. 478 sqq.; al-San'ani. Subul as-salam, Cairo
1345, iii. 45 sqq.; al-Shawkani, Nail al-awtar Cairo 1345, v. 295 sqq.
-- Discussion of the various views in the authors mentioned and in
al-Nawawi. at-Madjmu', Cairo 1348, ix. 390 sqq. -- A survey of
the differences among the great schools is given in Ibn Hubaira, Kitab al-ifsak,
Aleppo 1928, p- 164 sqq. - On riba as a grave sin cf. Ibn Hadjar
al-Haitami, Kitab al-zawadjir, Bulak 1284, i 231 sqq. -- European treatment,
generally: Goldziher, Die Zahiriten, p. 41 sqq.; Snouck
Hurgronje, Vers-preide Geschriften, ii. 141 sq-, 152 sq., 244
sq.; Amedroz. in JRAS 1916, p. 299 sqq.; Hanafis:
Bergstrasser--Schacht. Grundzuge des islamischen Reckts, p. 62 sq.; Dimitroff,
Asch-Schaibani, in MSOS, xi/ii. 105 sq., 156 sqq.; Shafi'i's:
Juynboll, Handbuch des islamischen Gesetzes, p. 270 sqq.; do., Harldleiding',
p. 285 sqq.; Sachau, Muhamrnedanickes Recht, p. 279 sqq.;
Malikis: Guidi-Santillana. Somlario del dirillo malechita, ii. 136 sqq.,
282 sqq.; Imamis: Querry, Droit musulman, i. 402 sqq.
- On methods of evasion ct. Juynboll, op. cit.; Schacht, Das
Kitab al-hiyal wa 'l-makharidi des al-Khassaf, chap. 2 and 3 with transl.
and commentary (this text is supposed to belong to 'Irak, c. 400 A.H.). - On
the practice of taking interest ct. Juynboll, op. cit., and the
travellers, e.g. Snouck Hurgronje, Mekka in the latter part of the 19th
century, p. 4 sq.; Polak, Persien, i. 345.