Ribā (ربا) - Usury in Islamic Law
Etymology and Translations
- Etymology: The term “Ribā” (ربا) originates from the Arabic root ر ب و (r-b-w), which means “to increase” or “to grow.”
- Arabic: ربا (Ribā)
- Turkish: Riba
Definition
Ribā, commonly interpreted as “usury,” refers to the unjust gains in trade or business, specifically in situations involving loans and financial transactions. It is defined under Muslim law as “an excess according to a legal standard of measurement or weight, in one or two homogeneous articles opposed to each other in a contract of exchange, and in which such excess is stipulated as an obligatory condition on one of the parties without any return.”
Significance in Islamic Law
Ribā is strictly prohibited in Islamic jurisprudence as it is seen as a form of exploitation and injustice. The prohibition is grounded in various Quranic verses and Hadiths, where Allah condemns the practice of charging excessive interest.
Key Quranic Verses:
- Surah Al-Baqarah (2:275): “Those who devour usury will not stand except as stands one whom the demon has driven to madness by his touch.”
- Surah Al-Baqarah (2:278-279): “O you who believe! Fear Allah and give up what remains of your demand for usury, if you are indeed believers. If you do it not, take notice of war from Allah and His Messenger.”
Comparative Context
Ribā has similarities to the Hebrew concept of נֶשֶׁךְ (Neshec), found in biblical texts, which also condemns exploitative financial practices. In Mosaic law, conditions of gain for the loan of money or goods were rigorously prohibited (Exodus 22:25; Leviticus 25:36).
Legal Implications and Ethical Considerations
Islamic financial transactions are thus structured to avoid Ribā, promoting fairness and ethical dealings. Financial instruments like Murabaha, Ijara, and Musharaka are designed based on profit-sharing or fixed-service fees to circumvent the exploitative nature of traditional usury.
Books for Further Studies
- “Islamic Finance: Law, Economics, and Practice” by Mahmoud A. El-Gamal
- “Islamic Finance: Principles and Practice” by Hans Visser
- “Riba, Bank Interest and the Rationale of Its Prohibition” by Muhammad Nejatullah Siddiqi
Takeaways
- Ribā, or usury, is firmly prohibited in Islamic law due to its exploitative nature.
- Ethical financial practices within Islam emphasize fairness and mutual benefit.
- The prohibitions have historical parallels in other Abrahamic faiths, advocating for a just economic system.
Conclusion
Understanding Ribā’s prohibition reflects Islam’s broader commitment to social justice and ethical dealings. By prohibiting exploitative financial practices, Islamic law seeks to ensure economic transactions are fair, promoting communal welfare and moral integrity in financial matters.
For further guidance, scholars continue to study and interpret laws to harmonize contemporary financial practices with Islamic ethical standards.
