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The Is1amic Doctrine ofRibaProhibition
A Modular Hermeneutical Examination
Azeemuddin Subhani
A thesis submitted to theFaculty of Graduate Studies and Research
in partial fulfillment of the requirements of the degree ofMaster of Arts
Institute of Islamic StudiesMcGill University, Montreal
Canada
October, 2001
© Azccmlluuin SlIbhanÎ zoo 1
1+1 National Libraryof Canada
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CONTENTS
ACKNOWLEDGEMENTS v
ABSTRACT............................................ vi
Chapter
1. INTRODUCTION
The Objective 1
The Approach .
The Scope 2
The Thesis 3
The Issue 4
The Organization 14
II. THE CONCEPT
THEMEANING
Usury/Interest -
Corresponding tenns in Various Languages...... 17
Riba - The Arabic Term
Morphological & Lexical Meaning..................... 20
Qur'anic and Sunnaic Usage............................... 23
Contextual and Historical Meaning.. 26
Juridical Meaning 28
Intrinsic Meaning 39
iii
THE REGULATORY FRAMEWORK 40
Toleration Model 40
Limitation Model 41
Prohibition Models 42
The Philosophical Model 42
The Religious Models 44
Biblical Structural Model 44
The Biblical Injunctions . 44
Qur'anic/Sunnaic Structural ModeL..... 45
The Qur'anic Injunctions........... 46
The Sunnaic Injunctions 49
III. THE ISLAMIC MODEL... 51
The Qur' anic/Sunnaic Structural Model 51
The Muslim Traditional Hermeneutical Model. 56
The Muslim Liberal Hermeneutical Model. 66
IV. CONCLUSION
Hermeneutical Examination
- Traditional and Liberal Models........ 74
BIBLIOGRAPHY 85
iv
ACKNOWLEDGEMENTS
l am grateful ta Alliih, The Almighty, for the inspiration ta
commence, the courage ta concluct and the strength ta complete this project.
My special thanks are due ta my respected professor and thesis
supervisor, Professor Wael B. Hallaq, for his inspiring academic guidance
and appreciation, and for his patience and understanding. My thanks are
also due ta Professor Uner Turgay, the Director of the Institute of Islamic
Studies, for his crucial advice, encouragement, understanding and support.
A1m Yaxley and Dawn Richards of the Institute administration deserve a
ward ofprofound thanks for their ever-available support.
The staff of the Islamic Studies Library, particularly Salwa Ferahian
and Wayne St. Thomas have earned my special thanks for their expert
guidance and help.
l must also mention and thank my old time friend and colleague
Shahid Burney for exhorting me ta return ta the academia, and later for his
assistance with obtaining research materials from the UK.
l also owe a debt of gratitude ta Carl Sharif EI-Tobgui for his
timely and invaluable help with the Arabic grammar.
Last but not the least l must single out and thank my wife, Atiya,
for her patience and understanding.
v
ABSTRACT
Author : Azeemuddin Subhani
Title : The Islamic Doctrine ofRibaProhibition
Department : Institute of Islamic Studies
Degree : Master ofArts
The Islamic prohibition of riba- is unequivocal but textually not
explicit. The traditional and liberal theological, juridical and
philosophical hermeneutical effort has addressed it comprehensively but
not conclusively. This inconclusiveness is due to the absence of the
identification of the distinctive characteristic of ribâ, resulting from the
use of limited scope pre-defined juridical and economic paradigms
employing a contextual exoteric approach, excluding the broader esoteric
content. This promotes an internaI hermeneutical imbalance between the
variables of meaning, application, rationale, underlying cause and
consequence of riba, preventing the full convergence and congruence of
these narrowly defined paradigms with the broadly implied paradigm in
the Qur'an and the Sunna, and obstructing the promulgation of the
prohibition. The resolution of this hermeneutical gridlock, predicated
upon the discovery of the distinctive rationale and the derivation of the
underlying cause of ribà prohibition, has a direct bearing on the expansion
ofscope and unreserved acceptance of the prohibition.
vi
Auteur :
Titre:
Faculté:
Grade:
RÉSUMÉ
Azeemuddin Subhani
La doctline islamique de la prohibition du no.i
L'Institut des études islamiques
Maîtrise ès Arts
L'interdiction islamique du rib.iest textuellement sans équivoque, même si la
nature de celui-ci reste à être explicitée. L'activité helTI1éneutique théologique, juridique
et philosophique - autant traditionelle que libérale - a eu soin de traiter cette question
d'une manière compréhensive, sinon, pour autant, définitive. Cet état des choses tiendrait
à un défaut de préciser les caractéristiques particulières propres au riba, résultat d'une
application de paradigmes juridiques et économiques préconçus ayant une portée limitée.
Ceux-ci s'appuient sur une approche contextuelle exotélique qui exclut la signification
ésotérique plus étendue du telTI1e « noa-», provoquant ainsi un déséquilibre
helTI1éneutique interne entre les variables portant sur le sens, l'application, la raison
d'être, la cause motlice et les conséquences du ribi. Ce déséquilibre a pour effet, d'une
part, d'empêcher la convergence et la congruence intégrales de ces paradigmes à
définition étriquée avec le paradigme de caractère plus général entendu par le Coran et la
Sunna et, d'autre part, d'entraver la mise en application de la prohibition. La résolution
de cette impasse helTI1éneutique - laquelle exige une mise en évidence du caractère
singulier du noa, en plus d'une identification de la cause motlice sous-tendant son
interdiction - pèse d'une manière directe sur un éventuel élargissement de la portée de la
prohibition ainsi que sur une acceptation générale et sans réserve de celle-ci.
VIl
CHAPTERI
INTRODUCTION
The Objective
The research project, of which the present study is the foundational
structure, is designed to examine the current scholarship on the Scriptural
doctrine of ribÏJ prohibition for hermeneutical balance and for proposaI of
any required hermeneutical realignment.
The Approach
The approach adopted for this research project is exclusively
conceptual, and not historieal or contextual. The argumentation is based
entirely on rational analysis without any reliance on historical and
contextual evidence. It is recognized, however, that contextual evidence
asbib nuzül, Le. the occasions or circumstances of revelation - is an
indispensable instrument of Qur'anic exegesis. But, firstly, the discovery
of Divine Law, universal truths and principles per se, although sometimes
aided by the historieal context, is not and should not be constrained by it.
Similarly, the application of the discovered Divine Law is not and should
not be constrained by the modem, more neutrally called contemporary,
context. Secondly, the mode of employment of this historical context by
the contemporary scholars is such that it leads not to clarity and
tmanimity but to ambiguity and multiplicity in interpretation. It appears
1
to be quite fashionable for the contemporary scholars to attribute - often
with self-proclaimed certitude and without historical verification - any
number of practices, even self-contradictory, to the ancient civilizations
to suite their self-serving line of argumentation. Any meaningful reliance
on historical evidence leads directly into the issue of historiography,
which would caU for an independent study in its own right.
The Scope
The main focus of this study will be a hermeneutical examination
of the current Muslim thought models on the interpretation of the Islamic
doctrine of prohibition of riba, in terms of the variables of meaning,
application, rationale (wisdom: ~llJanah), cause (ratio legis: 'ilia) and
consequence (punishment) goveming the concept of riba. This
examination of the thought models will be limited to the conceptual
conclusiveness oftheir argumentation excluding the question of the depth
and breadth of the argument and the authenticity of the supporting
historical evidenceemployed. Hermeneutical flaws will be drawn out but
the actual resolution of any indicated hermeneutical problem is not part of
this study. This study will, however, outline an independent perception of
the structural aspects of the prohibitory model based on an objective
examination of the Qur' anic injunctions and the Propheti8
pronouncements, in preparation for the later development of an
2
independent thought model. The indicated ijtihiidic task will also be
outlined and the current scholarship will be examined in this backdrop.
The supporting hermeneutical analysis of this independent thought
mode! will not be presented here, but has been developed by this writer in
outline, and presented separately as a research paper. This paper will be
fmiher researched, developed and refined, and presented later as this
writer's doctoral dissertation.
The pre-Islamic religious, philosophical and legal thought on the
subject, though a useful backdrop for a fuller understanding of the concept
and its evolution, in any meaningful detail is beyond the scope of this
study; it will only be sketched to the extent germane to the study.
The Thesis
The thesis of this study is that the CUITent hermeneutical models of
the doctrine of riba prohibition have a fundamental internaI hermeneutical
imbalance, stemming from the failure of the adopted exoteric approach,
operating within the limited-scope jmidical and economic paradigms, to
identify the distinctive and exclusive nature of riba. The identification of
this esoteric meaning, and the concomitant internaI hermeneutical
realignment, is indispensable for the full congruence of the narrowly
defined CUITent models with the broadly implied prohibitory model
discoverable from the Qur' an and the Sunna.
3
The Issue
The doctrine of prohibition of riba is one of the central tenets of
Islam. The prohibition is divinely ordained - both Qur'mlic and Sunnaic.
Punitively, its violation is regarded as a grave sin, threatened with severe
ecclesiastical consequences. For the believers, therefore, the temporal
enforcement of this prohibition should have been no different from its
acceptance as a pillaI" of faith. However, that is not the case. What sets
this terret apart from the other tenets, in the matter of enforcement, is the
fact that while its injunctions are totally strict and unequivocal on
prohibition, they are, inexplicably, not self-explanatory. It is a case of the
paucity of explicit guidance - both Divine and Prophetic - on a crucial
tenet. The quest for the discovery of the true meaning of the prohibited
riba, in order to capture the true prohibitory model, has been the focus of
Muslim scholarship since the time of the classical development ofIslamic
law. Yet, in spite of precision on the juridical level, so far this trek has
proved to be slippery and the destination a mirage. The meaning remains
as elusive and the iitihadic challenge as daunting as ever. This research
project too is a quest in this direction.
The focus of the present study, as explained above, is on the
CUITent scholarship on the subject in terms of its two hermeneutical
models - namely the Traditional Model and the Liberal Model. The
presentation of the 'Traditional' and 'Liberal' will be on conceptual and
not on chronological lines. Each Model will straddle centuries of time-
4
lines and their representative scholars. These Models will be umbrella
models, not necessarily rnirroring any particular age or individual
exclusively. Here, Traditional/Liberal will not be synonymous with
Classical/Contemporary. The Traditional Model, while predorninantly
propounded by the classical scholars, has important contemporary
followers as well. Similarly, the Liberal Model, while predominantly
propounded and developed by the contemporary scholars, neve11heless
finds support, perhaps even roots, among sorne of the classical scholars.
Being lexically very rich in meaning, the Arabic term riba, in its
contextual and legal technical application, subsumes the age-old concept
of usury/interest, which has been encountered throughout recorded history
in terms of toleration, limitation or prohibition. This historical practice,
therefore, requires and will receive examination in the development of the
conceptual analysis.
This issue of toleration, limitation or prohibition of usury/interest
has engaged human attention since time immemorial. Yet, for its own
unique reasons, it has not been satisfactorily and comprehensively
resolved so far. It has been the focus of inquiry and action by the ancient
law-code givers, rulers, philosophers, prophets, theologians, jurists and
econornists. It has been directly addressed and prohibited by the Holy
Scriptures and the Prophets of the three great monotheist religions of the
world - Judaism, Christianity, and Islam.
5
Throughout recorded economic history, this issue of toleration,
limitation or outright prohibition ofusury/interest and, later in the Islamic
context, ribihas received philosophie, religious and secular scholarship so
copious and voluminous - not as much fi:om originality and variety as
from repetition - that any further academic effort, on conventional lines,
will be an exercise in futility.
The conventional lines of argumentation on this subject have
taken the following approaches.
The ancient legal systems and the ancient philosophieal
scholarship, conventionally employing the tenn usmy as a straight
fmward exclusive economic concept, treat its limitation or prohibition
issue from the angle ofjustice and morality (exploitation), and in the case
of the philosophieal scholarship, additionally from the angle of natural
law (infertility ofmoney). So much has been said so weIl on these lines of
. justice and morality that any meaningful addition to this conventional
chain of thought appears to be extremely difficult, if not impossible.
However, the conventional philosophieal natural law argument of
infertility (of money) requires further examination.
The conventional pristine religious thought in Judaism,
Christianity, and Islam faithfully treats the riba, or its counterpart,
prohibition as Scriptural, and hence its violation a sin. The prohibition is
strict and unequivocal. It could, therefore, be contended that the subject
should require no further human intellectuai effort. However, the
6
rationale (1;.ilanah) of the prohibition, which is sought not for faith but for
action, is Scripturally not always clearly delineated. This rationale is
regarded by the religious scholarship to be either a matter of ritual
obedience1 or contextually to be of a moral, spiritual, social and economic
character based on a literaI and contextual meaning of the concept. The
extant exegetical treatment of this identified rationale for prohibition,
along these conventionallines, is very comprehensive and convincing, but
inexplicably, not conclusive. It is this issue, not of the exhaustivenessbut,
of the conc1usiveness of the identified rationale for prohibition, which, in
the absence of any further Scriptural revelations or Prophetic guidance, is
a prime candidate for ijtihiid, and thus a point of departure from the
conventional scholarship. And this is the Hne of inquiry of this research
project.
A concurrent detailed hermeneutical examination of the Biblical
injunctions and the Judaic and Christian exegetical thought on usury,
though very crucial in the historical evolution of the issue, is beyond the
scope of this study for reasons of manageability. However, for proper
historical perspective, the structural Biblical model of usury will be
summarized, leading into the detailed examination of the Islamic
injunctions and the Muslim hermeneutical models of riba, the main
subject ofthis study.
1 I1man Ahsan Khan Nyazee, The Concept ofRibiiand Islamic Banking(Islamabad: Niazi PublishingHouse, 1995), 104..
7
The conventionai Muslim scholarship treats the Scriptural riba
prohibition as c1ear, strict and unequivocal, technically and contextually
translatable as usury/interest, other commodity excess, or benefit and
hence, stemming from economic, social, moral and spiritual rationale, and
as punishable ecc1esiastically and, according to a minority opinion2,
temporally as weIl. Yet, unlike the other two main prohibitory
foundations of Islamic financial law, gharar (speculation) and maysir
(gambling), this third prohibitory foundation, ribiï, though unequivocal in
injunction, is so enigmatic in Interpretation, that it appears to be the
supreme of aIl the Quaestiones Vexatae of Islamic law3. In spite of the
c1assical and contemporary, traditional and liberal scholarship -both
Muslim and Orientalist- devoted to it, riba has so far defied a universal
consensus on its definition, delineation of scope, identification of the
rationale and underlying cause of the prohibition, and its correlation with
the nature of the prescribed punishment in Islam. The only consensus is
that riba, whatever it means, covers or signifies, is strictly and
unequivocally prohibited and ecc1esiastically punishable in Islam, though
again its enforcement is subordinated by sorne to the doctrine of
need/necessity.
Given this CUITent fluid and inconclusive state of the exegesis and
juristic extrapolation of this crucial Islamic concept, the fundamental
2 Altaf Gauhar, Translations From The Quran. (Lahore: Sang-e-Meel Publications, 1989), 136.
3 S.E.Rayner, The TheOlY ofContracts in Isiamic Law (London: Graham & Trotman, 1991),266.
8
research (ijtihad) question of ribâ still remains what it is, why it is
prohibited, and how it is punished. The thrust of this ijtihad is not even to
attempt to question the Divine prohibition, but only to comprehend it
fully so as to facilitate its faithful enforcement in letter and spirit.
These questions, unanswered so far, point to a lack of cognizance
of the full import of the concept of ribii, which in turn has led to a pre
occupation with an arbitral)' nalTowing of its juristic application to the
economic-financial sphere only, and, even within that nalTOW sphere, to a
diversity of interpretation leading to juristic disagreement, prompting
contemporary attempts at seeking Qur'anic and Sunnaic support for the
legitimization and legalization of certain of its forms, thus promoting
what might be labeled the scholarly Liberal Model, in juxtaposition to
the juristic Traditional Model of ribâ. This lack of agreed delineation of
the concept is compounding the confusion and hindering the juridical
transformation from interpretation to implementation, in spite of juristic
initiatives in that direction at both the national and internationallevels in
the Islamic world.
In this restricted economic-financial model, ribâ, signifying
"excess" (not in the pejorative sense of impropriety and impermissibility
but only in the neutral sense of increase or growth), is equated with excess
through nasJ'ah or nasa' (delay) or with excess through qadr (estimation).
The nasJ'ah or nasa' is the excess arising from benefits of delay and is
9
called ribi a1-nasJ'ah. The qadris the excess arising from weight, count or
measure and is called ribi al-faç/f.
The Muslim Traditional and the Liberal Models both operate
essentially within the ambit of the conceptual ribi a1-nasJ'ah and ribi a1
faç/l, although with differing perceptions of the meaning of the two terms
which causes confusion, Further complexity is added with the
introduction of the historical concept of ribi a1-jiilliliyya (the ribi
practiced in the pre-Islamic Arabia), and of the contextual concepts of
ribiof the Qur'an (the ribicontended to be prohibited by the Qur'an) and
n'biof the Sunna (the ribi contended to be prohibited by the Sunna). The
adopted manner of association ofthese two terms with ribi a1-nasJ'all and
ribi a1-faç/1, compounds the confusion further, in the manner of the
"terminological confusion syndrome,"5.
Thus, regardless of the complexity referred above, the point of
note is that both the Models limit the application of ribË1 to the economic
financial sphere, and thereby rely upon the identified economic, social,
moral and spiritual rationale for the prohibition. However, again both
Models make no attempt to reconcHe this identified rationale for
prohibition with the prescribed ecc1esiastical punishment for violation.
There is extant a large body of exegetical and juridical works in
support of both the Traditional and the Liberal Models. A review of this
copious literature, in translation or through contemporary commentaries,
4 Nyazee, The Concept ofRibii andls/amie Banking, 20-21.
10
reveals the following essential features of these models that are detailed
in Chapter III.
The Traditional Model, detailed and documented in Chapter III, in
its classical version only, in the development of the prohibitory model
employs u~ül al-fiqh- "a compound term [covering] the methods by
means of which law is formulated" 6 i.e. "the methodology of the jurist or
judge for deriving a legal rule from the texts"7. Accordingly, it treats the
Qur'an and the Sunna as complementary primary sources, and thus
regards both the so-called Qur'anic ribii al-nasl'ah and the so-called
Sunnaic ribii al-facjl, as a single-sourced equally clearly and unequivocally
ordained prohibition8.
The Liberal Model, also detailed and documented in Chapter III, in
a serious departure from the Traditional Model, in complete disregard for
u~ül al-fiqll, treats only the Qur'an as the primary source and the Sunna
as a secondary non-complementmy source10, with an implied lesser
binding force. Accordingly, it compartmentalizes ribii into two categories
by source. Primary, for this model, is ribii of the Qur'an Le. the ribii
deemed to be prohibited by the Qur'an, which is opined by them to refer
to ribii al-nasl'ah or ribii al-jiihjJiyya only. Secondary, for this model, is
ribii of the Sunna Le. the ribii deemed to be prohibited by the Sunna,
5 A term coined by Professor Wael Hallaq in his "Introduction", Islamic Law and Society, 2 (1996): 136.6 Wael B. Hallaq, A HistoryofIslamic Legal Theories (Cambridge: University Press, 1997),21.7 Nyazee, The Concept ofRibii and Islamic Banking, 17.8 Ibid.,17.9 Ibid., 8.10 Ibid., 11-13.
11
which is opined by them to refer to ribi a/-facjl only. The Model,
therefore, regards the so-called secondary Sunnaic ribi a/-facjl prohibition
as not strictly binding. Even within the ribi of the Qur'an which it refers
to as ribi al-nasJ'ah, the Liberal Model has an internaI difference of
opinion. One group, spearheaded by Rashid Rida, relying on the
contextuality of one of the Qur'anic injunctions (prohibition of "ribi
doubled and re-doubled") Il, limits the prohibition to compound interest
only, exempting from the prohibition simple interest as being non-
exploitative. The other group, however, treats both compound and simple
interest as prohibited under its classification of ribi of the Qur'an I2.
Another chain of thought limits the prohibition to interest on
consumption loans, exempting interest on production loans as being non-
exploitative. 13 The extreme liberal view treats the prohibition of an forms
of ribi as dispensable on the sanction ofthe doctrine ofnecessity/need. 14
The Traditional Model is distinguished by the near unanimity of
opinion on at least the major premises, of prominent c1assical and
contemporary scholars named in Chapter III. In the case of the
contemporary traditionalists supporting this Model, their method of
interpretation (use of u~iïl a/-fiqh for primary/secondary source
determination), is not in agreement with the Traditional Model. 15
1] Q. 3:13012 Nyazee, The Concept ofRibiiand Islamic Banking, 11-13.13 The view of many secular economists.14 'Abd a1-Razzaq SanhÜ11, Ma~iidir al-Ifaqq fi 'l-Fiqh al-Isliimi, 6 vols. (Beirut: a1-Majma' a1-' ArabI alIslamI, n.d.)Vol. III, 237.15 Nyazee, The Concept ofRibii and Islamic Banking, 13.
12
The Liberal Model, on the other hand, is in fact a hybrid model
encompassing a multiplicity of many divergent individual views and
divergent methods of interpretation and extrapolation with the only
common agenda of somehow seeking exemption of modem bank interest
from the riba prohibition.
The views of these classical and contemporary scholars, in their
individual versions, are not the focus of this study. What is germane to
this study is rather the combined scholarship of these groups. The
juridical definitions and explanations of individual scholars in Chapter II
and the deposition of these models in Chapter III will therefore only
portray the representative views that bring out the fundamental points of
each group and the inter-group divergence. As will be demonstrated in
Chapter IV, the divergence between these two collective sets of
scholarship, and their internaI hermeneutical imbalance, stem from a lack
of synthesis between the variables of the perceived meaning, application,
rationale, cause and consequence of ribi.
The ultimate resolution of this divergence of opinion requires an
internaI balancing of the current hermeneutical models through a
conclusive answer to the question of the intrinsic what, why, and how
surrounding the concept of ribii, in order to align these models completely
with the prohibitory model in the Qur'an and the Sunna. This study,
however, will only extract from the extant exegetical, juridical and
Islamic economics scholarship on the subject of riba the factors that have
13
impeded the capturing of the full import of the prohibition. It will be
argued that this desideratum stems from the non-identification of the
distinctive and determining characteristic of riba and, as already pointed
out above, from the resulting internaI hermeneutical imbalance in the
Models, in terms of their perception of the meaning of the term riba, the
method and spheres of its application, the identified rationale and the
derived underlying cause for its prohibition, and the correlation between
the offense and the punishment.
The study will conclude that the hermeneutical Traditional and
Liberal Models both have internaI hermeneutical imbalance that inhibits
the full import of the Islamic prohibition of ribi. The magnet for the
Traditional Model, incorporating the wisdom and life-long endeavors of
the classical fuqahii: is the Qur'anic/Sunnaic prohibitory model, while the
magnet for the contemporary Liberal Model is the Ancient Limitation
Mode!. Therefore the full realization of the balancing prohibitory
Qur'anic/Sunnaic Model is required in order to remove the promulgatory
impediments.
The Organization
Chapter II will introduce in detail the concept of usury, interest,
and riha, covering the meaning and the regulatory framework. It will first
examine the equivalent historical terms in the ancient Sumerian,
Egyptian, Greek, Hebrew, Sanskrit/Hindi, Persian/Urdu and English
14
languages in order to glean the philosophieal and religious thought on the
issue.
It will then present the morphologieal, lexical, Qur'ànic and
Sunnaic, contextual, historical, juridical and intrinsic construction and
meaning of the Arabic tenu ribi.
This chapter will also attempt to place the concept in its
evolutionary perspective. It will present the various prohibitory models of
usury/ribi. These illclude the Toleration Model, covering the permissive
primitive practice and the Arab }ihiliyya practice, the Limitation Model,
coverillg the rate-limitillg ancient law code and later medieval practice, and
the Prohibition Model covering the Philosophieal Model and the Religious
Models covering the Biblical Model and the Qur'anic/Sunnaic Model. It
will alsovery briefly examine the hermelleutics of the pre-Islamic models.
ln support ofthese models there will be a summary presentation of
the civil legislation, the philosophical discourse and the religious
injullctions. The latter include the prohibition injunctions from the Old
Testament, the New Testament, and the Qur'an and the relevant
important Islamic Traditions (a1J.acDtl1).
Chapter III will outline an independent perception of the structural
aspects of the religious prohibitory model based on an objective
examination of the Qur'anic injunctions and the Prophetie
pronouncements, and the indicated ijtihadic task.
15
This chapt~r will then present the Muslim, Traditional Model of
ribâ as developed by the classical fuqaha and supported by the mainstream
contemporary exegetes, and the Muslim Liberal Model of ziba, as
developed mainly by the contemporary scholars, both in terms of the
meaning, application, rationale, cause and consequence of ribâ
prohibition.
Chapter IV will present and summarize the hermeneutical analysis
of the Traditional and the Liberal Models, and the conclusions of the
study.
16
CHAPTER II
THE CONCEPT
This chapter will focus on the meaning and the regulatory
:fi:amework of the concept of usury/interest/ribà. It will present the
equivalent telms in the ancient Sumerian and Egyptian, Greek, Hebrew,
Sanskrit/Hindi, Persian/Urdu and English languages. It will then examine
the morphological, the lexical, the Qur'anic and the Sunnaic, the
contextual, the historical, the juridical and the intrinsic construction of the
Arabic term ribii. It will conclude with the presentation of the regulatory
framework and the underlying injunctions.
THEMEANING
(1) Usury/Interest - Corresponding Terms in Various Languages
(a) Sumerian
The Sumerians used the same word, mas, primarily for calves and
secondarily for interest. 16
(b) Egyptian
The Egyptian linguistic usage seems to have developed its word for
interest, ms, from the verb "to give birth", ms}. 17
(c) Greek
The Greek term for usury/interest is tokosJ which means
"offspring". 1x
16 G. R. Driver and 1. C. Miles (ed.), The Babylonian Laws (Oxford: Clarendon Press, 1955), l, 174.
17
(d) Hebrew
The Hebrew language has two biblical terms for interest. The first
term is neshekh, literally meaning bite or sting, which occurs in the Exodus
(22:24) and in the Deuteronomy (23:20). The second term is tarbit or
marbit [cognate of the Arabic root r b wj, literally meaning increase, which
additionaIlY occurs in the Leviticus (25:36-37). Various contextual
meanings have been assigned to these two terms, including "advance, ,
interest verSus accrued interest" and "accumulating interest versus fixed
amount ofinterest", and "interest from the standpoint of the debtor (bite =
neshekh) versus interest from the standpoint of the creditor (increase =
tarbit or marbit). The meaning of interest is not usury in the modem sense
of the term, that is, excessive interest, but aIl, even minimal, interest. There
is no difference in law between various rates of interest as aIl interest is
prohibited. 19
The Dictionary of Islam, by Thomas Patrick Hughes, goes one step
further in defining the Hebrew term as including gain, whether from the
loan of money or goods or property of any kind. It states that, in the
Mosaic Law, conditions of gain for the loan of money or goods were
rigorously prohibited.2o
17 Fritz Heichelheim, An Ancient Economie History, trans. Joyce Stevens (Leiden: Sijthoff, 1958), J,lOS.18 Aristotle, The Politics, trans. T. A. Sinclair, revised and re-presented Trevor J. Saunders, (London:Penguin Books, 1992),87.19 Encyclopaedia Judaica- CD ROMed., s.v. "Usury" by Haim Hermanp. Cohn.20 Thomas Patrick Hughes, A Dictionary ofIslam (Lahore: Premier Book House, 1989), 544.
18
(e) Sanskrit/Hindi
The equivalent term is biyajmeaning increase.
(f) PersianlUrdu
The equivalent translated term is süd which literally means
'profit,.21
(g) English22
(i) Original Meaning
Originally, usury meant a "payment for the use of a thing". It was
thus synonymous with the currently used term of "interest " of any kind.
On the other hand, originally, "interest" meant an additional payment that
which is "between" (Interesse) the present position of the crediter and what
it would have been if the loan would have been repaid to him on the fixed
date, Le. a compensation for 'loss emerging' (damnum emergens) from
failure by debtor to repay on the stipulated date. This represented an
exception to or evasion from the prohibition of usury.
(ii) CUITent Meaning
In current usage, usury has become synonymous with excessive
interest only. Interest therefore now refers to non-excessive interest only.
The Oxford Dictionary defmes interest as" the money paid for the use of
21 Fazlur Rahman, 'Ribïi and Interest', lslamie Studies, 3 (1964),1.
19
money lent or for the forbearance of a debt according to a fixed ratio", and
usury as " the practice of charging, taking, or contracting to receive,
excessive or illegal rates of interest for money on loan".
(2) The Arabic Term Riba
(a) Morphological Construction and Lexical Meaning23
The morphological construction and lexical meaning of the Arabie
term ribii will be examined in the fullest det ail so as to comprehend the
various connotations of the term and its Qur'anic usage.
The linguistic root of this Arabie term is [ 12 ul4, which
grammatically is a defectiveroot because of the presence of the long vowel
was the third radical.
This root appears only in the first five of the total fifteen verbal
forms ofthe Arabie language.
The Form 1 verb from this root, in the thirdperson masculine
singular case, is raba in the perfect tense and yarbuwin the imperfect tense,
and the verbal noun is rabii' or also rubüw, meaning to increase, to grow, to
grow up, to exceed, to be more than25. This is an intransitive verb. The
active participle, the doer or actor, is riibin. The verb being intransitive, not
taking or requiring a direct object Le. intra-active versus inter-active, there
22Arthur Birnie, Th~Historyand Btlties ofInterest (Glasgow: William Hodge & Company, 1952),3, 7.23 The grammatical analysis has greatly benefited from the help of Carl SharifEI-Tobgui.24 Hans Weill, A Dictionary ofModem Written Arabie. ed. J.M.Cowan. (Ithaca, NY: Spoken LanguageServices Inc.1979), 374.25 Ibid.
20
26 Ibid.27 Ibid.
is no passive participle, the done ta or the acted upon. The imperfect tense
verb yarbuw, above, .appears in Q. 30:39.
The derived Form II verb from this root, which is causative, in the
third persan masculine singular case, is rabba in the perfect tense and
yurabbJ in the imperfect tense, and the verbal noun is tarbiya, meaning ta
make or let grow, ta raise, ta rear, ta bring up, ta educate, ta teach, ta
instruct, to breed, ta raise, ta grow, ta cultivate, ta develop.26 The active
participle, the doer or actor, is murabbin and the passive participle, the
done ta or the acted upon, is murabban. This form does not appear in the
Qur' anic' riba prohibitory verses.
The derived Form III verb from this root, in the third persan
masculine singular case, is riiba in the perfect tense and yuriibJ in the
imperfect tense, and the verbal noun is muriibiitun, meaning ta practice
usury27. The active participle, the doer or actor - taker of usury (usurer), is
muriibin and the passive participle, the done ta or the acted upon - giver of
usury, is muriiban. The Qur'an does not employ this derived Form, either as
verb, active/passive participle or verbal noun, in any of the prohibitory
verses dealing with ribii.
The derived Form IV verb from this root, also causative,
overlapping with Form II, in the thiid persan masculine singular case, is
a'rba in the perfect tense and yurbJ in the imperfect tense, and the verbal
21
noun is i'rbii, meaning to make grow, to augment, to increase, to exceed28.
The active participle, the doer or actor, is murbin and the passive participle,
the done to or the acted upon, is murban. The imperfect tense verb, yurbJ,
above, appears in Q. 2:276.
The last derived Form V verb from this root, in the third person
masculine singular case, is tarabbâ in the perfect tense and yatarabbâ in the
imperfect tense, and the verbal noun is tarabbin, meaning to be brought up,
to be educated, to be bred, to be raised29. The active participle, the doer or
actor, is mutarabbin and the passive participle, the done to or the acted
upon, is not applicable. There is no Qur'anic usage of this form in the riba
prohibitory verses.
The derived noun, from this root ribilo (indefmite) and al-riba
(definite) has been, assigned the lexical meaning. of interest, usurious
interest, USury.31 The Qur'an employs the indefinite noun, ribi, only once
in 30:39. According to conventional Muslim scholarship, though not
unanimous and less weighty, the term ribi here refers to gift and not to
usury. The Qur'an employs the definite noun, al-riba , in aIl the other
prohibitory verses on ribi, Le. 2:275, 276, 278, 279, 3:130, and 4:161,
always written as al-ribawi, but pronounced as al-ribi as above. This is
because the waw in al-ribawa serves only as a seat for the subsequent alif
maqsura and has no morphological value. A parallel written construction is
28 Ibid.29 Ibid.30 Ibid., 375.31 Ibid.
22
to be found in the case oftwo important Qur'anic terms, $aliit, written as
$aliit or as $alawiit but both pronounced as $aliit ,and zakiit, written as
zakiit or as zakawiit but both pronounced as zakiit.
The adjective of this noun is ribawl, meaning usuriouS32. This
adjective, ribawl, has not been used in any of the above quoted prohibitory
verses, and to the best of lœowledge, elsewhere in the Qur' an. This
adjective is associated with the six commodities 1}.adith of the Holy Prophet
presented below.
Lexically, ribii has also been translated as 'Danism,33. The term
Danism means lending money on usury, and is derived from the Greek
word Daneisma meaning a loan.34 Danism has been translated into Arabie
to mean "loans with fil;.ish [excessive] riba."35
Cb) Qur'anic and Sunnaic Usage
The term riba in its various derived forms oecurs both in the
QUI'in, as indicated above, and in the a1}.adith. However, in the form of a
definition, a specifie meaning of this term and its derivatives is not readily
and directly discernable either from the Qur'an or from the a1}.adith. The
Qur' anic and the Sunnaic usage of the term, including and beyond the
prohibitory context, conveys various shades of meaning, as detailed below-,-
32 Ibid.
33 Rarith Sulayman Faruqui, Faruqi's LawDietionary - Arabie English, (Tripoli: Libyan Publishing Rouse,1962).34 E. Cobhan Brewer, Dictionary ofPhrase &- Fable. (1898),329-330.
23
The Qur'anic usage of the term, as partly touched upon above,
conveys at least six different shades of meaning as fol1owS36:
(i) to grow:
'~.. wa tara al-arcja hiïmidatan fà-idha anzalna 'alayha I-ma'a
ihtazzat wa rabat... " (al-Hajj: 5)
"And thou beholdeth the earth barren, then when We send
down water upon it, it quickens and grows..." (Q. 22: 5)
(ii) to prosper; to increase;
"Yam1J.aqu 'alliihu alriba wa vurbJ al-~adaqat... " (al-Baqarah: 276)
" God destroys ribâ, but makes alms prosper" (Q. 2: 276)
"Wa ma ataytum min riban liyarbuwa 5 amwalin nas fala yarbu
'inda Alliihi... " (al-Rüm: 39) .
"And what you invest in ribâ so that it may increase upon
the people's wealth, it increases not with God"(Q. 30: 39)
(iii) to Tise ( e.g. of a hill):
"... Wa awaynahumailarabwatin... " (al-MüminÜD: 50)
IIAnd W'e gave them refuge upon a height" (Q. 23: 50)
35 Faruqui, Faruqi's Law Dietionary - Arabie English. .
36As summarized by Fazlur Rahman in his, 'Ribâ and Interest.' Islamic Studies3 (March 1964): 1-43.
24
"... Ka-mathalijannatin bi-rabwatin ... " (al-Baqarah: 265)
"As the likeness of a garden upon a hill" (Q. 2: 265)
(iv) to swell (e.g. foam):
"... Iii1Jtamala saylu zabadan arribivan... " (al-Ra 'd: 17)
"Then the torrent carried a swelling scum" (Q. 13: 17)
(v) ta nurturè; to raise Ca child):
''Rab birhamhumikamirabbavinJ$aghiran" (Bani Isra 'Ji: 24)
"Have mercy upon them as they raised me up when 1was a child" (17: 24)
" Qila ilam n urabbika fini waHdan... " (al-Shp 'ra': 18)
"He said, did we not raise thee amongst us as a child?" (Q. 26: 18)
(vi) to augment; increase in power:
"... Fi ikhadhahum ikhdhatan ribiyatan" (al-lfiqqah: 10)
"He seized them with a surpassing grip" (Q. 69: 10)
'~ .. An takuna ummatuhu hJya arhimin ummatin ... " (al-Na1J1: 92)
"That one nation be more powerful than another nation..." (Q. 16: 92)
25
The Sunnaic usage of the term riba conveys an economic
connotation of increase, excess, growth in the context of 'exchange of
similarity and dissimilarity', as illustrated by the famous ribiiwi
commodities (gold for gold, ...) iJadith quoted below. However, the
meaning of the riba /incest equivalence iJadith, also quoted below, requires
further elaboration.
(c) Contextual and Historical Meaning
The contextual and historical setting of the Revelation is relied
upon heavily by the exegetes in support of their perception of the meaning
and definition of the, ter;m ribii.
The Qur'mic usage of 'al-riba doubled and re-doubled' (3:130) is
believed by some of the exegetes to refer to, and to restrict, the meaning of
the term riba to the Arab jiihiliyya period financial practice of doubling,
and later re-doubling, of the principal amount for extensions of the credit
term beyond the original. This implies either the absence or the exclusion
of a charge for the original term of the loan or credit from the coverage of
riba. Regardless ofthis ambiguity, what is not clear from this association is
whether ihis was the only form of riba being practiced then.
While the authenticity even of many transmitted PropheticaiJadIth
is difficult to verify, the verification of the many historical daims about
the Arab financial practices of the time is even more difficult. As pointed
out in Chapter 1 (Approach), the contemporary exegetes tend to attribute
26
any number of financiai practices, even self-contradictory, to the ancient
Arabs to suite their line of argumentation. The documentation of the
ancient Arab financiai practices is virtually non-existent. The Qur' an and
l;.adith literature is the only extant reliabIe, though by design not
exhaustive, guide on this empiricai question.
Similarly, on the strength ofQ. 4:161, which, it is c1aimed by sorne
exegetes, links the Jewish practice of exacting the prohibited ribiï with
their devouring of others' property wrongfully, riba is given an economic
meaning and a usurpation rationaie. However, this c1aimed link between
these two parts of the verse needs to be proved.
Furthermore, the famous sermon of the Holy Prophet at the time of
his Farewell Pilgrimage to Mecca is cited as evidence of the existence and
abolition of the riba of his unc1e, 'Abbas ibn 'Abd ai-MuHalib. This
authentic l;.adith does refer to the practice but not to its form. The
mechanics of this financiai practice attributed to him arenot ascertainable
from the l;.adith itselfto derive a precise meaning of the term ribii.
The historicai context provides a usefui point of reference. But the
employment of contextuai references for the derivation of principles
requires additional historicai evidence to fully understand the modus
operandi of the practices being referred to.
27
(d) Juridical Meaning
A review of the literature reveals that the juridical meaning
assigned to riba, though diverse in presentation and detail, essentially refers
to any increase in a transaction of exchange without a counter value.
The Dictionary of Islam, by Thomas Patrick Hughes, gives a
juridical definition as follows:
"A term in Muslim law defined as an excess according to a legalstandard of measurement or weight, in one or two homogenousarticles opposed to each other in a contract of exchange, and inwhich such excess is stipulated as an obligatory condition on one ofthe parties without any retum"
It further explains: "The word ribi appears to have the samemeaning as the Hebrew neshec, which included gain, whether fromthe loan ofmoney, or goods, or property of any kind. In the Mosaiclaw, conditions of gain for the loan of money or goods wererigorously prohibited." 37
The various juridical definitions and expositions, underlying the
above, as given by the fuqahi and commentators, are given below38.
The traditional position is summed up by the definitions of al-
Sarakhsl, al-Kasanl ~d I1?n Rushd:
al-Sarakhsl, a f;Ianafi authority, in his book al-Mabsii,t defines ribi
both in its literaI and technical meaning as:
37 Hughes, A Dictionary ofIslam, 544.38 The presentation here is based mainly on the presentation by Nyazee in his, The Concept ofRibii andIslamic Banidng, 19-27.
28
Ribiï in its literaI meaning is excess ... and in the technicai sense (inthe sharI'ah), ribiïis the stipulated excess without a counter value inbay' .39
and further goes on to explain the two types of riba -- ribiï al-nasJ'ah and
ribiï al-facfl-- as fo11ows:
[The words]· facfl is ribiï imply facfl througIl qadr and they implyfacfl through a period of deIay, and both are intended. This waselaborated in the tradition of 'Ub'iidah ibn al-~amit ...40
Another I:Ianafi authority, Abü Bakr al-Kiisiini defmes ribiï only in
its technicai (legal) sense in the context of its two types - ribiï al-facfl and
ribiï al-nasiï' (nasJ'ah ). Even in this technicai sense, he does not give an a11-
encompassing Iegai definition. Moreover, he does not give the literaI
meaning. He defines riba as:
Riba in the j argon of the Iaw is of two types: ribiï al-facfl and ribiï alnasiï'. As for ribiï al-facjl, it is the excess over the substance of thewealth that has been stipulated in the contract of bay' according toa Iegai criterion, which is [realized through]measure and weight inthe genus, while according to al-Shiifi '1, it is the absolute excessspecifica11y in food with uniformity of genus. As for ribiï al-nasiï', itis the difference (excess) between the termination of delay and theperiod of delay and the difference (excess) between the possession('ayn) and its non-possession (dayn) in things measured andweighed with different genera as well as in things measured andweighed with the uniformity of genera. This is according to us, andaccording to al-Shiifi '1, it is the difference between the terminationof the period and the delay in foodstuff and precious metais (withcurrency-vaIue) specifica11y.41
39Abü Bakr MlÙ}.ammad ibn Ab1 Sahl al-SarakhsI, al-Mabsü{30 vols. (Cairo: Matba'at al-Sa'adah,1324
31/ 1906-13. Reprint Karachi, 1987). vol. 12,109.40 Ibid., 111.41 Abü Bakr al-KasanI, Badi'j' al-$ani'j'(Beirut: Dar al-Kitab a1-'ArabI, 1982). vol. 5, 183.
29
Ibn Rushd defines ribiiin the context of the ribiiofjiihiliyya only:
The jurists agreed that usury is found in two things: sales and thatwhich is established as a liability through sale, credit, or othertransactions. Ribii which is incurred as a liability is of two kinds.First is that about which there is an agreement, and this is the ribiiof the period ofjiihiliyya (the pre-Islamic age) which is prohibited,as they used to stipulate excess in loans and then delay the period(ofrepayment). They used to say, "Grant me further delay and l willincrease it (the amount)." This is what the Prophet (God's peaceand blessing be upon him) meant when he said at the farewellpilgrimage, "Take heed, verily the ribii of jiihiliyya is annulled andthe first (daim) of ribiiI cancel is that of 'Abbas ibn al-MuHalib."The second kind is "loss for hastening the period." This iscontroversial and we will describe it in what follows. 42
The later compàrtmentalization of ribii into' ribii of the Qur'an (to
mean ribii aJ-nasJ'ah) and ribii of the Sunna (to mean ribii al-faeJl), which
provided the foundation for the liberal thought on ribii, finds its basis in al-
Ja~~a~ who states:
The ribii that was known to the Arabs and was practiced by themwas the lending (qarcf.) of dirhams and diniirs for a period with anexcess in proportion to what was lent and on which they had agreed.They were not acquainted with the spot sale when it contained anexcess of the same genus.43
Based on this practice, al-Ja~~a~ further defines ribi as:
The ribii of the jiihiliyya is a loan given for stipulated period with astipulated increase on the principal payable by the 10anee.44
The above referred basis for the compartmentalization of riba is
reinforced by al-Raz! in his al-TafSIr al-KabIr:
42Abü al-Walid Mul;1ammad ibn Alpnad ibn Mul;1ammad Ibn Rushd, Bidiyat al-Mujtahid waNihiiyat al-Muqta~id 2 vols. (Cairo: Dar al-Salam, 1995). vol. 2, 96.43Abü Bakr Alp:nad ibn'Ali al-Ja~~as al- Raz!. AfJ.kiim al-Qur'iin. (Beirut: Dar al-KiŒb al-'ArabI, n.d.).vol. 1,465.44 Ibid., vol. l, 469.
30
Know that ribi is of two kinds: ribi al-nasl'ah and ribi al-façflRibi a1-nasl'ah was weIl known and familiar during the jiïhiliyya.This was so because they used to give wealth on the condition thatthey would take a fixed amount each month, while the principalamount still remained. Thereafter, when it was time for therepayment of the debt, they demanded the principal from thedebtor. If he was unable to pay, they increased the daim and theperiod. This is the ribi that they used to practice... As for the ribithrough spot transaction (ribi al-naqd), it is the sale of wheat forflour made from it, or what is similar.45
In rebutting the views of Ibn 'Abbas that the prohibited ribi is ribi a1-
nasl'ah alone, al-Razl further elaborates as follows:
The evidence for Ibn 'Abbas is that the words of the Exalted, "Allah haspermitted sale," include the spot sale of one dirham for two dirhams andHis words, "prohibited ribi," do not include it, because ribi is anexpression of excess and each excess is not prohibited. On the other hand,His words, "prohibited ribi," include a specific type of contract that theyused to conclude as ribi .This was ribi al-nasl'ah. Thus, His words,"prohibited ribi," apply exclusively to nasl'ah and it is, thereforeestablished that His words, "Allah has pernfltted sale," include the spotsale and His words, "prohibited ribi," do not include it, which necessarilyimplies that it is permitted. Further, it is not possible to say that it isprohibited by the iJadith as it implies the restriction of the apparentmeaning of the Qur'an with an individual narration (khabar wii1Jid), whichis not permitted. This is what Ibn 'Abbas (appears to have) conveyed andits essence lies in whether the restriction of (the text of) the QUI'an ispermitted or not? As for the majority of the mujtahids, they agreed aboutthe prohibition ofribi in both kinds: the first kind by the QUI'an, and thesecond by the Sunna. 46
Shah Wall Allah, a traditionalist scholar, seems to provide support to the
liberals by further stressing the distinction when he explains:
Know that ribihas two aspects: actual and figurative. The actual form isin debts, and we have mentioned that it has a central place within the
45Fakhr al-DIn al-Razi, al-Tafsir al-KabIr. 32 vols. (Beirut: Dar I1).ya' al-Turath al-'ArabI, 1980, vol. 7. 91.46 Ibid., 92.
31
topic of mu'imaliit. The people in jiihiliyya were intensely occupied withit, and it was the cause of continuous wars, and a little of it used to leadto more. It became necessary to seal its door as a whole, therefore, what isrevealed in the Qur'an about it was revealed. The second type is ribii al·fàcjl, the source of it being iJadith ... and this was called ribii by extensionand as a metaphor for the true form of ribii ... It was then that ribii in thismeaning was practiced widely till the true legal form came to be realizedin this toO.47
Abü Zahrah, seems to echo Shah warr Allah, when he spells out the
distinction between ribiiof the Qur'an and ribiiof the Sunna:
Before we put down the pen, we will discuss the legal issue related to ribii, which is that the excess in lieu ofthe period [of repayment] is the ribâ ofthe jiihiliyya . It is also called ribii al-nasl'ah, because the excess in it is inlieu of the period, that is, the duration of delay. The scholars are all inagreement about its prohibition, and it is the ribii of the Qur'an ... Thereis a technical form of ribii or that of the Islamic usage. This is the ribii ofsales (ribii al_buyü,).48
Finally, Abü1 A'la Mawdüdi, though a traditionalist, clearly spells out the
foundation of the liberal position by pointing out the distinction between ribii al-
nasl'ah as the ribi of (prohibited by) the Qur'an, and ribi al-fàcjl as the ribâ of
(prohibited by) the Sunna:
We have stated earlier that ribi, in fact, is that excess or fi'idah which acreditor receives from the debtor as a stipulated excess over and abovethe principal amount. In the terminology of the law, this is called ribii alnasl'ah. Thus it is ribi that is paid and received in a loan transaction. It isthis ribi that has been prohibited by the Qur'an. The whole Ummahagrees about its prohibition.49
47 Shah WaIl Allah, Ifujjat Allah al-Bilighah, 2 vols. (Cairo: Dar al-Turath, 198?).vol. 2, 106-107.48Abu Zahrah, Foreword to Zakl al-DIn Badawl, Nll?arlyat al-Riba a1-MlÙ}.arrarn Fï al-Sharl' a al-Isliirniyya.(Cairo: Dar wa -Ma!abi' al-Sha'b, 1940). Trans. Imran Ahsan Khan Nyazee, quoted in his The Concept ofRiba and Is1arnic Banking, 13.49 Abu1 A'la Mawdudi, Boo[Interest], (Lahore: Islarnic Publications (private) Ltd.,1989), 163.
32
... Ribi aJ-facjlis the excess that is found in the spot exchange oftwo things of the same genus. The Messenger of Allah (p.b.u.h.) hasprohibited this form.5ü
The juridicaI définitions and explanations by the Liberal" scholars are
quite varied. The following summations of the position of Ibn 'Abbas, Ibn
Qayyim, Mul1ammad 'AbduhIRashld Riçlii and Sanhür1 are based on the work of
Nabil Saleh 51:
'Abdullah Ibn 'Abbas, habitually called Ibn 'Abbas (b. 622C.E.), a cousin
of the Roly Prophet, along with some of the other Companions (Usman Ibn Zayd,
'Abdullah ibn Mas'üd, 'Urwa ibn Zubayr and Zayd ibn Arqan) regarded ribi al
jihiliyya as the only unlawful ribi which involved increase in the debt for
increase in the period ofrepayment. They regarded ribi aJ-nas]'ah and ribi al-facjl
as being provided for in the famous six commodities iJadith and as being lawful.
They based their liberal interpretation on an authentic but controversial l;.adith,
reported by Ibn 'Abbas himself and regarded by them as superseding the six
commodities iJadith, which substantially states: "No ribi except in the nasl'ah"
(meaning pre-Islamic ribi). Ibn 'Abbas is reported to have later retracted on his
earlier in~erpretation.
Ibn Qayyim al-Jawziyya, a I:Ianbali theologian, differentiates between
"hidden ribi" (ribi khali) - a ribiby way of increase (ribi aJ-facjl), and "manifest
50 Ibid., 165.
33
ribi" (ribijaH)- a riba by way of deferment (ribi a1-nasl'ah). For him, "hidden
ribi" is not forbidden in itselfbut only when it is a way to gain "manifest ribi ':
which is forbidden for itself. For him, the degree of prohibition was not the same
in both the categories - much stronger in "manifest ribi" or ribi al-nasJ'ah than
in "hidden ribi" or ribi al-fàq1. Consequently, "manifest ribi " or ribi a1-nasl'ah
cannot become lawful except in the case of pressing necessity (darura muJji'a),
like that 'which allo~s the eating of carrion. But, "hidden ribi" or ribi af-fàiflcan
become lawful in case of need (llija) only. "Hidden ribi" or ribi al-fàq1 is
prohibited when there is fear that may lead to ribi a1-nasJ'ah and it is allowed in
case ofneed.
Multammad 'Abduh and Rashld Riga are the first contemporary scholars
of the 201h century who came o~t cleady in defense of the modem bank interest
as exempt from the ribiprohibition. They considered modem bank interest as not
covered under the historical practice ofribi al-jahiliyya which they treated as the
only prohibition, and even that excusable by the doctrine of dire necessity. They
treated ribi al-faq1 and ribi al-nasl'ah both as Sunna-based and therefore not
even prohibited - only makrüh. Their views on ribi have been summarized by
Nabil Saleh as follows:
" (a) The only disallowed ribiis ribi aljahiliyya (pre-Islamic riba), whichis the manifest (jaR) ribi and consequently is prohibited not as a way ofperforming an usurious transaction but as an usurious transaction in itself.As for the two other sorts of ribi, namely ribi a1-faq1 and ribi al-nasl'ah(both provided for in :E:Iadith and not in the Qur'an), their prohibitiontends to close the loopholes which otherwise might permit manifest ribi(FibijiIi). Thus ribi a1-fàifl and ribi al-nasl'a)J are under a presumption of
51 Nabil A. Saleh, Unlawful Gain andLegitimate Profit in Islamic Law, .second ed. (London: Graham &Trotman, 1992),34-37.
34
prohibition and this presumption is not conclusive but rebuttable. Thusagain the sale of any of the six articles mentioned in the hadith, with anincrease and whether in a hand-to-hand transaction or in a deferred one, isdisallowed only if it is intended to lead to manifest ribiï (ribiïjiïlJ), whichtakes place when interest accrues on interest aIready accounted by thetime the transaction was concluded.52
(b) As a result, the first increase on the termed loan is lawful, even thoughagreed in consideration of the delayed term of payment. But if, onmaturity date, it is decided to postpone that maturity date against afurther increase, that is the unlawful ribiï al-nasl'ah.53
(c) The consequence which comes to mind is that whereas ribiï jiiH, themanifest ribiï, can be deemed lawful only in case of pressing necessity,such as the one which allows the eating of carrion, the two other sorts ofribiï, namely ribiï al-faql and ribiï al-nasl'ah (both provided for in ijamthand not in the Qur'an) are regarded with aversion (kariïhiyya) but not asunder a rule ofprohibition.54
(d) Fïnally, it is attributed to Shaikh MlÙ}.ammad 'Abduh that he foundways to show that under Islamic law both interest generated by savingsbank accounts and that generated by insurance policies were admissible."
For 'Abd al-Razzaq Sanhurl, "the prohibition of ribiï is the ruleand has nothing to do with aversion (karahiyya),55nevertheless thedistinction between ribiï al jiïhiIiyya, ribiï al-facfl and ribiï al-nasl'ahshould be maintained according to the following analysis: ribiï al-faql is away to achieve ribiï al-nasl'ah which is a way to achieve ribiï aljiïhiliyya;for it is sufficient , as far as ribiï al-nasl'ah is concemed to allow paymentto be postponed once the debt has matured, charging further interest, soas to attain ribi al Jiïhiliyya . Consequently, ribi al-faql and ribi alnasl'ah are not under a direct prohibition (contrary to pre-Islarnic ribii,-which is), but und~r a prohibition ofillicit m~ans - a prohibition designedto close the loopholes which might lead to pre-Islamic ribi.. 56 The resultof such degrees of prohibition is that ribi al jiïhiliyya is allowed only incase of pressing necessity (darüra mulihha), while ribiï al-faql and ribiï alnasl'ah are deemed lawful in case ofneed {JJ.ii}a).57"
52 Fatiiwii a1- Imiim MuiJammad RashldRicfi, eds. S. Munajjid and Y. Khürl. 5 vols. (Beirut: Dar al-Kitabal-Jadid, 1970). vol. 11. 606.53 Ibid., 608-609.54 Sanhürl, M~iidiral-IJaqq, vol. III, 220. Karahiyya is a religious censure with no practical effect on thetransaction itself.55 Ibid., 222-234.56 Ibid., 222-237.57 Ibid., 237.
35
A review of the definitions and explanations given above indicates a
process of graduaI watering down of the perception of the ribiprohibition as one
moves from the traditional to the liberal thought model. On one end of the
prohibitory spectrum is the complete and absolute prohibition, as evidenced in
the definitions by al-Sarakhsl, al-Kasanl and Ibn Rushd, cited above. On the
other end of the spectrum is a steadily widening scenario of partial and
contingent prohibition as evidenced in the definitions of the liberal scholars, Ibn
'Abbas, Ibn Qayyim and Mullammad 'Abduh /Rashld Riq.a cited above. It
culminates in the formulation of Sanhurl, above, where aIl forms of ribi are not
prohibited, and even when prohibited, become permissible on the sanction of the
doctrine ofnecessity and even need.
It will be noticed that in aIl the juridical definitions and explanations
cited above, the focus of attention is the form ofthe financialleconomic excess,
how it arises, how its prohibition is sourced and, in case of the Liberal scholars,
how it can be restricted or even exempted. The definitions do not go beyond the
technical usage of the term ribi to connotations other than the
financialleconomic which are expressed in the Qur'an itself as detailed above.
Moreover, these legal depositions and explanations do not touch upon the
question ofrationale of the prohibition.
Within this technical paradigm of ribi, based on the juridical definition
by al-Sarakhsl, given above, in which al,·Sarakhsl gives the literaI meaning of
riba as 'excess' and the technical meaning as 'the stipulated excess without a
counter value in bay', Nyazee has developed a very concise and lucid juridical
36
definitio:p.al model which is outlined below58. As will be shown below, this
definitional framework is very useful in clarifying the 'terrninological confusion
syndrome' referred to above.
Nyazee identifies the main elements of the above al-Sarakhsl definition as:
1. Ribiiis "excess".
2. It is an excess that is stipulated in a bay'(exchange).
3. It is an excess that is without a cOlmter value. 59
Derived. from the ahove, his definitional model is:
Ribiiis excess revealed in two ways through:
1. Qadr (estimation) arising from weight, measure, or count of the two
quantities being exchanged in a baye. If the exchange is ribawl, this
excess is called ribii al-facjl whose beneficiary is the seller, or in case of a
loan, the creditor.
2. NasJ'ah or Nasa' (delay) arising from benefits of delay of payment or
delay of delivery, measured by the period of delay. If the transaction is
ribawl, this excess (benefit) is called ribii al-nasJ'ah, whose beneficiary is
the party effecting the delay.60
Based on the above distinction of the beneficiary of the excess, contrary
to popular understanding, in any loan transaction the creditor is the recipient
58 Nyazee, The Concept ofllibi and Islamic Banking, 19-39.59 Ibid., 20.60 Ibid., 20-21.
37
of ribi_al-fagl and the debtor is the recipient of (the benefit of) ribi al-
nasl'ah.:. Interest payment received by the creditor is ribi al-fagl and not ribi
al-nasl'ah6J• It will be noted that the ribi al-nasl'ah is not objectively
quantifiable as it is the unspecifiable benefit attributed to the debtor through
the use of the loaned amount during the period ofrepayment. T~e recognition
ofthis distinction is very crucial for a correct understanding ofthe concept of
ribii. 62 The lack of clarity and precision on this point among many
contemporary scholars and even judges63 is the source of much confusion. In
complete disregard for this inter-Iocking relationship between these two
aspects of ribii, the contemporary scholars maintain, apparently without
sufficient justification, that "ribi al-nasl'ah is the ribiof the Qur'an and ribi
al-fagl is the ribi of the Sunna,,64. It can be seen that this Liberal assertion,
read together with the above conceptual distinction between ribi al-faç/J
accruing to the creditor and ribi al-nasl'ah accruing to the debtor, implies
unintentionally and inadvertently of course, that neither the Qur'an nor the
Sunna ofitselfhas a complete prescription for a loan transaction. The Qur'an
is being seen as catering to the borrower alone and the Sunna to the lender
alone. This is cleady an untenable implication. This compartmentalization of
riba- by the contemporary scholars into ribi of the Qur'an and ribi of the
Sunna is therefore conceptually not supportable. Nyazee maintains that this
61 Ibid., 23.62 Ibid.63 Noticeable in the different opinions expressed in the judgement of the Shari' ah Appellate Bench ofPakistan Supreme Court of December 23, 1999. See Web site of Advanced Legal Studies Institute,Islamabad (www.nyazee.com).64 Nyazee, The Concept ofRibiiand Islamic Banking, 23.
38
compartmentalization is rooted in the explanations of ribii provided by Ibn
Rushd, al-Ja~~a~ and particularly al-Raz!, all quoted above.65
Nyazee conc1udes that both facjl and nasJ'ah are to be found in the type of
ribi mentioned in the Qur'an, and both are inc1uded in the types [of ribi]
mentioned in the Sunna. Ribiaf-facj1 and ribi af-nasJ'ah are prohibited by the
Qur'an just as they are prohibited by the Sunna. In fact, ribi of the Qur'an
and ribi of the Sunna are exactly the same. The Sunna is merely acting as a
connitentary.66
(e) Intrinsic Meaning
While the term riba has been examined from the exoteric
morphological, lexical, and particularly contextual, historical, and juridical
angles, no attention appears to have been focused by the exegetes on its
esoteric intrinsic meaning. The search for the intrinsic meaning of the term
riba is at the heart of the whole iitihidic question. A very crucial question
remains unanswered, even unraised. What is the distinguishing
characteristic of the term that makes its lexical meaning of growth so
crucial for the doctrine of its prohibition? The successful quest for this
intrinsic meaning and distinguishing characteristic will constitute a
scholarly landmark.
65 Ibid., 23-24.
39
THEREGULATORYFRAMEWORK
The evolutionary pattern of the regulation of this concept will be
examined, not chronologically but in terms of regulatory paradigms. These
will be in the form of what might be labeled, conveniently, as the
Toleration Model, the Limitation Model and the Prohibition Model, the
latter incorporating the Philosophical Model and the Religious Model,
deriving their implementing force from custom, civil legislation,
philosophical discourse and Scriptural injunctions respectively.
Conceptually, the regulation of the concept of usury/interest/n'bi
has had a checkered history. It has alternated between total toleration and
partial limitation, as sanctioned by the community or the State in various
periods of history and in the contemporary world, and outright prohibition,
as expressed in ancient philosophical thought, and as divinely ordained in
the three great monotheist religious traditions.
The examination of these regulatory frameworks will coyer only
those aspects that are germane to the nature of this inquiry i.e.
hermeneutical analysis.
THE TOLERATION MODEL
In the Toleration Model, which historically extends from the
primitive period to the Jahiliyya period to even the contemporary period,
the regulatory framework is the simplest - there is no regulation. The
66 Ibid., 27.
40
practice of usury, in aIl its forms, persists even when it is exploitative.
There is neither condemnation, nor limitation, nor prohibition of the
concept. There is no hermeneutical issue.
THE LIMITATION MüDEL
In the Limitation Model, evidenced in the ancient developed secular
juristic cultures, and also later, the practic.e of usury is permitted, but
varying limits are placed on the maximum legally chargeable rate. The
prohibition is limiting in nature; it applies only after a certain point. The
meaning of the term is charge for the use of money, and hence the
application of the concept is accordingly only financiaVeconomic. The
rationale of the limitation of the practice is concem of the ruler/State for
the welfare of the poor. The consequence of any violation is therefore civil
law penalties. Thus within its defined parameters, the model demonstrates
perfect hermeneutical balance.
The ancient so-called Law Codes incorporating this model of
limiting the maximum chargeable rate of usury, in varying forms and
measures, are too numerous and copious to reproduce here. Similarly, the
later period State/Church edicts on the issue incorporating the limitation
model deserve a separate treatment.
For historical perspective, these ancient Law Codes, limiting the
usury rate, are the Ur-Nammu Code (c. 2050 RC.), the Code of Eshnunna
(c. 1925 B.C.), the Code of Lipit-Ishtar (c. 1860 RC.), the Code of
41
Hammurabi (c. 1700 B.C.), the Hittite Code (c. 1450 RC.), the Assyrian
Code (c. 1350 B.C.), and the Covenant Code (c. 1000 B.C.). 67
THE PROHIBITION MODEL
ln the Prohibition Model, characteristic of the philosophieal and the
monotheist religious traditions, there is an outright prohibition on the
practice of the concept. Hence, in this model, particularly in the religious
versions, it is very crucial to define the precise meaning of the concept, to
delincate the scope of its application, to identify the rationale and to derive
the underlying cause of the prohibition, and to justify the punishment for
the violation.
(1) THE PHILOSOPHICAL MODEL
The most influential ancient philosophieal model comprises the
Greek philosophical condemnation of usury/interest. Plato (c. 429-347
B.C.) and Aristotle (384-322 B.C.) both condemned and outlawed the
practice of usury/interest on loans. Their rationale for the condemnation
was the barrenness ofmoney. Aristotle condemned usury/interest in a c1ear
and reasoned manner in his philosophical discourse:
Of the two sorts ofmoney-making, one, as 1 have just said, is a partof household management, the other is retail trade: the formernecessary and honorable, the latter a kind of exchange which isjustly censored; for it is unnatural and a mode by which men gainfrom one another. The most hated sort, and with the greatest
67 George Mendenhall, Law and Covenant in Israel and the Ancient Near East (pittsburgh: BiblicalColloquium, 1955),9.
42
reason, is usury, which makes gain out ofmoney itself, and not fromthe natural use of it. For money was intended to be used inexchange, but not to increase at interest. And this term usury(tokos) [offspring], which means the birth ofmoney from money, isapplied to the breeding of money because the offspring resemblesthe parent. Wherefore of aU modes of making money this is themost unnatura1. 68
In this model, the contextual meaning of the term usury is a gain
from money, and in line with this meaning, the application is
financial/economic, although the literaI meaning of the term usury as
offspring (tokos) is suggestive of a possible broader application of the term.
The rationale for the condemnation is the naturallaw argument of fert ility.
Being only a philosophic edict without Divine Ordinance or State
legislation, it is only a moral exhortation without any ecclesiastical
punishments or civil penalties.
The seeds of a henneneutical imbalance are however clearly evident
in this mode1. The model starts with a meaning of usury as a broad concept
of offspring (tokos), but narrows it down to the practice of making money
from money, a financial application only, and again uses the broadly
applicable argument of fertility, to label the process as unnatural. The only
henneneutical balance ,in this model is between the rationale and the
consequence Le. observance ofnaturallaw.
68 Aristotle, Politica, 1,10,1258 a- b (Jowett trans1.).
43
(2) THE RELIGIOUS MODELS
These comprise· the Biblical and the Qul,"'anic/SunnaicModels
which represent the culmination of the evolutionary process of the concept
of ribi.
THE BIBLICAL STRUCTURAL MODEL
The Biblical Structural Model is the first divinely ordained
prohibitory mode!. A review of the injunctions shows that the Old
Testament is prohibitory about usury, while the New Testament is
recommèndatory about its converse i.e. charity. The Qur'an puts the
Biblical prohibition in perspective when, in 4:161, it refers to the
prohibition of riba for the Jews and to their violation of it at the pain of
grievous punishment. These Biblical structural models and their supporting
hermeneutical models, together with the actual practice, require a full-scale
study oftheir own. Only the Biblical injunctions are presented here.
The Biblical Injunctions:
(i) The Old Testament
Ifyou lend money to any ofmy people with you who is poor, youshall not be to him as a creditor, and you shall not exact interestfromhim.-Ex. 22:24.You shallnot lend upon interest to your brother, interest on money,interest on victuals, interest on anything that is lent for interest. Toa foreigner you maylend upon interest, but to your brotheryou shallnot lend upon interest; that the Lord your God may bJess you in allthat you undertake in the land which you are entering to takepossession ofit.- - Dr. 23:20-21.
44
And if your brother becomes poor, and cannot maintain himselfwith you, you shall maintain him; as a stranger and a sojourner heshalllive with you. Take no interest from him or increase, but fearyour God; that your brothermaylive beside you. Vou shallnot lendhim vour monev at interest, nor give him your food for profit. 1 amthe Lord your God, who brought you forth out ofthe land ofEgyptto give you the land ofCanaan, and to be your God - Lev. 25:3538. 69
(ii) The New Testament
The New Testament does not contain a detailed financial code of
behavior7o. The later Church teachings relied on the Old Testament
prohibition on usury. The New Testament mentions interest only in the
two accounts of the parable of the talents, in Mt. 25:27 and Lk. 19:23. The
parable simply incorporates the common Graeco-Roman practice of
receiving interest, without any statement either for or against its
morality.71
THE QUR'ANIC/SUNNAIC STRUCTURAL MODEL
The Qur'anic/Sunnaic Structural Model, is the second and the last
of the divinely ordained prohibitory models of riba. Since it is the main
topie of this study, it is presented in detail in the next chapter along with
the associated hermeneutical models. Only the prohibitory injunctions are
presented and examined here.
69 Italics mine.70 Paul S. Mills, "Shou1d Interest Exist?" (Ph.D. diss., Cambridge University, 1994), 14.
45
The Qur'iillic Injunctions
A review of the relevant verses ofthe Qur'an, quoted by aIl exegetes
and jurists, with minor differences of emphasis in interpretation, and
translated below indicates that chronologicaIly the Qur'anic prohibition of
ribi came in four stages:
(a) Disapproval:
Ribâ is declared to be deprived of God's blessing in Sürat al-Rüm
(Q. 30:39) which is Meccan and chronologicaIly the first in the ribi
prohibition process. Here ribi is simply disapproved, and not yet
prohibited. In terms of a possible prohibition rationale, ribi is contrasted
with zakit in the context of denial of God's blessing. In fact, as indicated
above, sorne exegetes go to the extent of arguing that this verse does not
even deal with usury/interest at aIl. They opine that here ribi does not
mean usury but rather a gift. Others maintain that the meaning of ribihere
is exactly the same as in the other relevant verses of the Qur'an. This
controversy, however, is germane not for the issue of the prohibition itself
but only for its historicity determination Le. whether the prohibition
process is ofMeccan or Medinan origin.
"That which ye lay out from ribi for increase through the propertyof (other) people, will have no increase with God: but that, whichye lay out from zakit, seeking the countenance of God, (wil1increase): it is these who will get a recompense multiplied." - (Q.30:39) - c.615 CE
71 A Van den Born and L. Hartman, "Loans," Encyclopedie Dictionary ofthe Bible, ed. L. Hartman (N.Y.:McGraw-Hill, 1963), 1361-62.
46
(b) Prohibition - Initial:
Riba is unequivocally prohibited for the first time in SUrat Ai
'hnran (Q. 3:130) which is Medinan. Here al-riba is specifically referred to
as "doubling and redoubling". This "continued doubling" is considered to
be a Meccan Quraysh practice, which, it is argued, was being envied by the
Muslims, after their defeat at Ul;.ud, as the financial cause of Quraysh
militalY superiority. In order to ward off this temptation, this referred
practice is being prohibited for Muslims' own welfare. In terms of the
meaning, al-riba here refers to a specifie usury practice, and the prohibition
rationale is stated to be true welfare and success. In fact, the liberal
exegetes mainly rely on the specificity of this verse for their argument that
the prohibited ribi subsumes only excessive or compound interest and not
benign simple interest.
"0, ye who believe devour Dot al-ribi, doubled and redoubled, andfear Al1ih so that you may (really) prosper" - (Q. 3: 130) - c.625 CE
(c) Prohibition - Reiteration
Riba is reiterated as a prohibited Jewish practice, equated with
rejection of faith, and declared punishable grievously in Sürat al-Nisi' (Q.
4:161) which is aiso Medinan. The prohibition and the punishment here
though specifically for the Jews, apply to the Muslims as weIl, not directly
but by implication. The meaning of the terrn al-ribi is not defined, nor
47
reference made to any specifie type of practice. The prohibition rationale
appears to be the rejection of Faith. Noteworthy is the fact that a
punishment is provided for the first time for the violation of the
prohibition. As pointed out above, in this verse, taking ribii and devouring
of wealth are cited as two distinct practices of the Jews, both of which are
equated with rejection of Faith, and held grievously punishable, without
any explicit causallink between the two practices. Hence rejection of Faith
appears to be the implied rationale for the prohibition.
''And they took al-ribii though t/ley were forbidden; and theydevoured peoples wealth wrongfully. We have prepared for thoseaJnong them who reject Faith, a grievaus punishment." - (Q. 4:161)-c.626CE
(d) Prohibition - Comprehensive and Final
In a tone of comprehensiveness and finality, al-riba is contrasted
with al-~adaqiit in terms of loss of AŒih's blessing. And further,
foundationally, al-ribii is contrasted repeatedly with al-bay' in terms of
strict denial of similarity, and prohibited, with specifie punishment of
Satanic insanity and eternal Hell-Fire for treating the two practices as
similar. Further punishment of war from God is ordained for violation of
the prohibition. These prescriptions are contained in Sûrat al-Baqarah (Q.2:
275-279), which are very late Medinan verses. The meaning of the term a1-
riba is not specified directly; only implied through contrast with al-~adaqiit
and al-bay'. The rationale for the prohibition is not spelled out; it is only
implied to be rejection of belief, and further implied through provision of
48
severe punishrnent in the Hereafter. A tradition is aseribed to Caliph 'Umar
to the effeet that the Roly Prophet did not live long enough after the
revelation of these verses to have been able to explain the meaning of these
verses.
"Those who devour al-ribi will not stand except as stands onewhom the [Satan] by his touch hath driven to madness. That isbecause they say: "sale [bay'j is like ribi, but Allah hath permittedsale and forbidden ribii. Those who after recciving direction Fromthcir Lord, desist, shall be pardoned for the past; their case is forAllah to judge. But those who repeat (the offcnce) arc companionsofthe Fire: they will abide therein for ever. "
- (Q. 2:275) - e.632 CE
"Allah deprives al-ribi of all blessing but blesses al-$adaqit withgrowth. andAllah loveth not those who arc ungrateful and wicked "
- (Q. 2:276) - e.632 CE
"0, ye who believe! Fear Allah andgive up all outstanding al-ribiifye arc indeed believers. " - (Q. 2:278) - e.632 CE
"Ifyou do it not, take notice ofwar from Allah and His Messenger.But ifye turn repent, you shall have yourcapital sums; deal notunjustly, and ye shall not be dealt with unjustly." - (Q. 2:279) e.632 CE
The Sunnaie Injunetions
The prohibition of riba is both Qur'arne and Sunnaie. In addition to
the Qur'anic verses cited above which are taken by many scholars to be the
basis of ribi al-nasJ'ah, there are a number of Prophetie al;.iclJth dealing
with the extension, elaboration and prohibition of riba which are taken by
them as the basis for the prohibition of ribi a1-fa41 The famous and often-
49
quoted are:
• From 'Ubidah ibn a$-$iimit, who sakI, "The Messenger ofAllih sakI,'Gold for gold, siJver for silver, wheat for wheat, barley for barley,dates for dates, salt for salt, like for like, jp equal weights, fromhand to hand Ifthese species differ, then, sell as you like, as longas it is from hand to hand II/Reported by Muslim.
• From AbüHurayrah , who said' "The Messenger ofAlliih said,Gold for gold, weight for weight, like [or like. Silver for silver,weight for weight, like for like. Ifone gives in excess or acquires anexcess, it is ribii "Reported byMuslim.
• 'Abd al-RlÙJ.min ibn Ab]Bakrah from his father, who said:"The Prophet proscribed the sale ofsilver for silver, gold for gold,except equal for equal, andhe ordered us to sellgold for silver, andsilver for gold as we liked "
• From Jibir, who said'"The Messenger ofAlliih has cursed one who charges ribii, he whogives it, one who records it, and the two witnesses; and he said,'They are all equal. ,,, Related by Muslim. In al-Bukhiii, simiJartradition from AbüJu1}.ayfah.
• From al-Mustadrak: The Prophet said," Ribi is ofseventy kinds, the least ofwhich is as bad as marryinghis own mother[incest}. "
These Qur'anic verses and lÙJ.idfth are the foundation on which and
from which the structural features of the Qur'anic/Sunnaic Model are
derived and presented in the next chapter.
50
CHAPTERIII
THE ISLAMIC MODEL
Before presenting and evaluating the traditional and the liberal
hermeneutical models, the salient structural features of the prohibitory
model derived from an objective study of the riba prohibitory injunctions,
contained in the Qur'anic verses and Prophetie a1Jicfith quoted above, are
presellted here. For ease of reference it may be labeled the
Qur'anic/Sunnaic Structural Model.
l.The Qur'anic/Sunnaic Structural Model
1.1 Prohibition
The prohibition is graduaI but ultimately unequivocal and strict as
reflected in:
• Initial Status Quo - represented by the period between 610 CE (start of
Revelation) and c. 615 CE generally regarded as the date of the first
riba verse Q.30: 39.
• First Disapproval- expressed, c. 615 CE, in Q.30: 39.
• First Prohibition - expressed, c.625 CE, in Q.3: 130.
• Further Reiteration - expressed as reminder of the earlier Jewish
prohibition in Q.4:161, c.626 CE.
• Final Prohibition - expressed, c.632 CE, in Q.2: 275-279.
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1.2 Meaning
1.2.1 Generic Meaning
The Qur'anic usage of the tenu rabilriba- conveys the meaning of
addition, excess, growth, as revealed in the various verses cited above.
1.2.2 Contextual Meaning
The Qur'an uses the tenu af-riba in the prohibitory verses, but without
assigning any explicit definite meaning to it. One contextual usage in the
Qur'an, af-liba a(j'ifan mucji'fatan (riba doubfing/redoubling) and the
juxtaposition of riba with rü'üsu amwifikum (capital, principal) conveys the
meaning of financial increase. The only other contextual use referring to the
Jewish practice of riba only mentions riba without specifying any particular
meaning or fonu. While generally believed to refer to their financial practice, it
could have a broader meaning.
1.2.3 Definition
The Qur'an does not provide any definit ion of riba. ft only contrasts
riba with ~adaqa (2:276), with zakit (30:39) and with bay (2:275). There are
Sunnaic indicators of the existence of riba in exchanges involving similarity of
genus.
52
1.3 Application
1.3.1 Generic Application
The verb raba has been employed in the Qur'an, as detailed above, to
indicate a process relating to earth (growth), to hill (rising), to foam
(swelling), to wealth (increase, prosperity), to child (nurturing), to nation
(augmentation), to God (power, increase).
1.3.2 Contextual Application
The concept of riba has been contextuaUy employed in the Qur'an, as
detailed above, as a financial growth process (usury/interest).
1.4 Rationale (Qilanah)
The Qur;ân does not provide any explanation, or even explicit mention, of
the rationale (/Jikmah) underlying the prohibition and the punishment for
violation. It only contrasts ribi with ba;!' (Q. 2:275) declaring one as 1}arim
and the other as iJaliil, in association with Satanic Insanity and HeU Fire
punishment for equating the two terms. The contrast of ribi with ~adaqa (Q.
2:276), and with zakit (Q. 30:39) is only an indirect indicator of the rationale
for the prohibition. The Sunnaic equivalence of ribawith incest with one's own
mother is a very stark contrast, but the underlying cause for the equivalence,
the ratio legis ( tilla), is not clarified.
53
1.5 Underlying Cause (ratio legis: 'illa)
The Qur'an/Sunna do not provide any definite pointers to the 'illa, the
underlying cause, of ribi, which could be applied to distinguish ribawl from
non-ribawl. A large number of differing 'iJal, as many as nineteen,72 have been
discovered by the classical jurists from the famous ribawlcommodities 1}adIth.
Sorne of these 'iJal are similarity, weighability, countability, measurability,
storability, valuability and edibility of the commodities.
1.6 Punishment
The Qur'an ordains strict ecclesiastical punishment for violation of the
riba prohibition in the form of Insanity, Extermination, War from God,
Infidelity, and etemal Hell Fire. There is no express mention of any temporal
punishment. There is Sunnaic condemnation of all participants of the riba
process, without specifying any punishment, and there is the Sunnaic
equivalence of ribawith incest with one's own mother, implying the associated
punishment.
The Ijtihiidic Task
These guidelines and wamings gleaned from the Qur'an and the Sunna have
posed an ijtihadic challenge to:
72 Nyazee, The Concept ofRibiand Islamic Banldng 68.
54
• Discover the distinguishing characteristic of riba that sets it apart from $adaqa,
zakiit and particularly from bay"
• Discover the fJilanah and derive the 'illa of ribËJ from the identified
distinguishing characteristic
• Delineate the meaning and scope of the term riba in the light of the identified
distinguishing characteristic, the !JilanaiJ and the tilla
• Develop a comprehensive juridical definition of the term ribii in line with the
above
• Develop the application criteria to differentiate the ribawl and non- ribawl
transactions, based on the discovered 1}ilanah and the derived tilla.
This ijtihiidic task has been pinpointed by Professor Frank E. Vogel:
"The question arises, why, if such transactions [ribâ] meetwith the approval of both parties (tradin), are they divinelydisapproved? The Qur'ân asks this very question, but in a morepenetrating way - why is sale [bay'] not like riba-? - and gives theemphatic, if obscure, answer that God has allowed the one andprohibited the other. Given the question and the response, itbecomes morally urgent ta be able to distinguish ribâ from ordinarytrade. What sorts of "increase" or inequality in exchange transformlawful commercial gain into condemned usury, despite bath parties'ready consent? In what circumstances does the desire for gainbecome perverted and corrupt? Unfortunately, the answers to thesevital questions have never been easy. The Caliph 'Umer reportedlylamented that the Prophet never spelled out the full scope of ribâ:
['Umer said,] The last verse revealed was the verse of ribii,and [then] the Messenger of God was taken [in death]. He had notexplained it to us. Sa leave ribâ and doubt [ribah]." 73
73Frank E. Vogel, and Samuel L. Hays, III. Islamic Law andFinance: Religion, Risk andRetum (TheHague: Kluwer International, 1998),63.
55
The Muslim Traditional and the Liberal Models which have
addressed the ijtihiidic task from many diverse angles are now presented.
The following chapter will present this writer's evaluation of the
hermeneutics of these models. Only the presentation of the structural
characteristics of these models here, and not the analysis, draws heavily
and liberally on the work of Nyazee.74
2. The Muslim Traditional Hermeneutical Model
2.1 The Proponents
The Traditional Model has the support of many classical scholars75.
Prominent among these, in alphabetical order, are: Abu Hamid al-Ghazali
(d. 505/1111), Ahmad b. I:fanbal (d. 241/855), Abu I:fanlfii (d. 150/767),
Mu1}ammad AmIn ibn 'Uthman ibn 'Abidin, (d. 1258/1868), Abû
Mu1}ammad 'Abd Allah ibn Sa'1d ibn I:fazm (d. 456/1064), Abu al-Walid
Mu1}ammad ibn A1}mad ibn Rushd (d. 595/1198), Abu Bakr A1}mad ibn 'Ali
al-Ja~~as al-Razi (d. 370/981), Abu Bakr ibn Mas'ud al-Kasanl (d.
587/1189), Anas b. Malik (d. 179/796), Shihab al-Dln Abu al-'Abbas
74Imran Ahsan Khan Nyazee teaches Islamic law at the Shari'ah Acaderny, International IslamicUniversity, Islamabad and is also associated with the local chapter of the International Institute of IslamicThought, Virginia, USA. He has authored rnany books on Islamic law and is the translator ofIbn Rushd'sBidiiyat al-Mujtahid, published as The DistinguishedJurist's Primer. The works relied upon here includehis The Concept ofRibiand Islamic Banldng, (Islamabad: Niazi Publishing House, 1995) and his IslamicLaw website on which he has made available for the researchers the entire 532-page 1999 judgernent ofthe Shariah Appellate Bench of the Pakistan Suprerne Court on the issue of riba, and his unpublishedEnglish translation of Zalà al-Œn Badawl's Nazarlyiit aJ-Ribii aJ-Mu1;J81Tam (Cairo: 1940) , and hisEnglish translations of extracts from the works of al-Ja~~as and al-Sarakhsi on ribËJ and bay'.75 The works of the above-named authors containing a treatrnent ofriba are given in thebibliography.
56
A4mad ibn Idiis Qaâifi (d. 684/1285), Shams al-Dln Mulfammad ibn 'Abü
al-'Abbas al-RamIi (d. 1004/1595), Fakhr al-Dln al-Razl (d. 606/1209),
Mu1}ammad ibn Isma'Il al-~an'anl (d. 211/826), Abü Bakr Mulfammad ibn
Abl Sahl al-Sarakhsl (d. 483/1090), Mul}ammad ibn Idds al-Shafi'I (d.
204/820), Abü Islfaq Ibramm ibn Müsa al- Sha!ibl (d. 790/1388), and
Mulfammad ibn al-ijasan al-Shaybanl (d. 189/805).
The Traditional Model has the support of many main stream
contemporary exegetes and scholars as weIl. One of the prominent among
these is Abül A'la Mawdüdi (d. 1979).76
2.2 The Model
The Muslim Traditional Hermeneutical Model of the Islamic
doctrine of riba prohibition has been developed mainly by the classical
fuqaha' and supported by many contemporary scholars, both named
above. Theil' individual presentations differ in detail - too many to
summarize here. But the summarized collective model essentially
maintains that:
Il ribi literally is "excess", and technically a "financial excess"
Il riba covers aIl forms of financial increase --whatever the
nature or the source
Il ribi is prohibited strictly and unequivocally by the Qur'an
supplemented by the Sunna, without anyexceptions
57
• ribihas a ritual obedience and/or an economic, social, moral
and spiritual rationale for prohibition
• ribi prohibition violation is gravely punishable
ecclesiastically
• ribi extension beyond the named six commodities is a point
of disagreement amongst the various schools of law.
A review of the available literature in translation and
commentary indicates complete agreement of the classical fuqahi' on
the essential features of the scriptural prohibition as summarized above.
Presentation of individual explanations would amount to repetition.
Their consensus, cast in modem terms, is that the prohibition covers
compound interest, simple interest and other types of ribi.77 The only
significant difference of opinion among the classical fuqahi' concems
the derivation of the detailed rules ('il1a) of ribifor the extension of the
prohibition, as detailed below.
2.3 The Method
The method of interpretation employed by the classical fuqahi',
forming the majority of the traditionalist group, and their identification
of the source of the prohibition is distinguished by their conforrnity with
76 His work on libii(süd) is given in the bibliography.77 Nyazee, The Concept ofRibii and Islamic Banking, 17.
58
the u$ül al_fiqll.78 Accordingly, they treat the Qur'an as supplemented
and elaborated (bayin) by the Sunna as one sourçe, and not the two,
separately and independently of each other, as two sources. Thus they
interpret the prohibition of riba as a single, single-sourced prohibition.
They maintain that the only source of prohibition is the Qur'an and that
the afl.adith are only elaboratory in nature, re-enforcing the Qur'anic
unequivocal prohibition, which is comprehensive and covers aIl "excess"
(riba) whether arising through nasJ'ah (delay), the so called Qur'anic ribii
al-nasJ'ah, or through qadr (estimation - weight, measure, count), the so-
called Sunnaic ribii al-tàcfl It is this method of interpretation that sets the
traditionalists apart from the liberals in the matter of the coverage of the
prohibition.79
2.4 The Meaning and The Application
The Model employs the literaI meaning of the term riba as
"excess,,80, but the various shades of meaning and applications of this
term used in the Qur'an, as illustrated above, do not find any treatment in
the Mode!. In the development of the Model, the focus of attention
immediately narrows down to only the contextual financial/economic
connotation of the term Le. usury/interest and other commodity excess.
7K Ibid.79 Ibid., 8.KO al-Sarakhsl, aJ-Mabsü!. vol. 12, 109.
59
81 Ibid.
In the juridical definition of the term, rib7J is equated with excess without
counter value8l, but the concept is not developed further.
2.5 The Coverage of the Prohibition
The classical fuqah7J', as explained above, basing their exegesis on
the U$ü] al-11qh and treating the Qur'an as the single source and the Sunna
as its elaboration, and treating the Qur'anic usage of the term rib7J as a
generic usage and requiring the bayiin (explanation) from the Sunna, treat
the rib7J prohibition, in the economic sphere, as aIl encompassing and
consequently, covering aIl forms of financial increase Le. both ribii a1
nasl'all and ribii a1-fa(:jl.
2.6 The Treatment of the Prohibition
The Model treats this financialleconomic excess as strictly
and unequivocally prohibited. It treats the prohibitory injunctions
and their supporting verses as mu1Jkamiit and not as mufashiibihiit. It
does not recognize benignancy of the charge, mutual agreement of
the parties, or need/necessity as grounds for any exceptions from the
ambit of the prohibition.
60
2.7 The Rationale (1Jilanah)
As to the rationale for the prohibition of riba, sorne traditional
scholars regard the observance of the prohibition as a matter of ritual
obedience.82 Therefore for them the discovery of the rationale of the
prohibition is not required or necessary. But, the majority of the
traditional jurists seek both the 17ilanah and the' i1ia of the prohibition83.
In line with the adoption of the contextual financialleconomic meaning of
the term, these scholars attribute economic, social, and the associated
moral and spiritual factors as the governing principles of the 17ilanah. The
word 'exploitation' could perhaps be used as a catchall term to capture
this wide spectrum of rationale very nearly completely. In dealing with
this rationale of exploitation, the Model, however, does not address the
question of the benignancy of the charge, or the presence of mutual
agreement of the parties.
2.8 The Underlying Cause (ratio legis: 'i1ia).84
The Traditional Model has accorded an extensive treatment - with
internaI significant disagreement - to the question of the ratio legis (' i1ia)
of the 17ulan of prohibition of ribawl commodities. The famous ribawl
commodities 17adJth of the Roly Prophet, quoted above, has identified
only six commodities (gold, silver, wheat, barley, dates and salt). The
82 Nyazee, The Concept ofRibiiand Islamic Banldng, 104.83 Ibid.
61
iJadIth has not c1arified whether the riba rule is restricted to these six
narned commodities or is extendable to other commodities as weIl, and if
so, what are those other commodities and how are they to be ascertained.
What is the ratio legis (' illa) to be applied for the extension of the iJulan
ofprohibition?
Sorne jurists, like the Ziihir1s, restrict the prohibition to the six
narned commodities only, on the basis of their rejection of qiyiis as a
valid source of law.85 Majority of the fuqahii, however, agreed on the
permissibility of the extension of the prohibition and employed qiyiS
(analogy) as the rnethod of extension. Sorne fuqahii sought the extension
through qiyas al-ma 'na (applied in the presence of higher or Jower order
literai meanings of the word under examination}.86 Others sought it
exc1usively through qiyas af- 'iiJa (applied in the presence of equivaJent
meanings of the word under examination) requiring the discovery of the
'i1la. 87 The discovered 'illa, however, is different according to the various
schools oflaw (madhiihib).
The I:Ianafi jurists consider the similarity of species and the
similarity of the method of estimation (qadr- but limited to weight and
rneasure only, exc1uding count) to be the 'i1la (as two factors) in the
ribawl c'ommodities iJadIth. When both factors are present, there is
H4 The following presentation of' illa is based on the work of Nyazee (67-71). These juristic differences ofopinion are detailed in many works ofIslamic fiqh including e.g.Ibn Qudamah, al-Mughnl. vol. 4, 124127,gS Ibn J::Iazm, al-MuiJalra, viii, 468.86 Nyazee, The Concept ofRibiiandlslamie Banldng, 68.87 Ibid.
62
prohibition of both excess in weight/measure (ribi al-facjl) and delay in
delivery (ribi al-nasJ'ah). When only one factor - similarity of estimation
method - is present, excess in weight/measure (ribi al-facjl) is permitted
but delay in delivery (ribi al-nasJ'ah) is prohibited. When both factors
similarity of species and similarity of method of estimation - are missing
(Le. dissimilarity of species and dissimilarity of methods of estimation),
both excess in weight/measure and delay in delivery are permitted,
enabling credit sales (buyii' al-nasJ'ah). Further sub-classifying the
weight factor into two different categories (smaIl weights for precious
metals and large weights for baser metals), the ijanafi jurists extend the
lj.ukm of ribi to aIl precious metals, aIl base metals, and aIl foods that
are measurable (by volume). Every thing sold by counting, at the time of
the Roly Prophet, is exempt from the prohibition.
The Shafi'i jurists treat currency-value (in the case of gold and
silver) and food-value (in the case of wheat, barley, dates and salt) to be
the 'illa. Accordingly, the riba prohibition extends to aIl precious metaIs
with a currency value and to aIl eatables.
The Malik1 opinion is the same as that of al-Shafi'i, with the
qualification of the food attribute by the additional requirement of
storability. The ribi prohibition extends to aIl storable food, and not to
perishable food.
The ijanbali jurists subscribe to the ijanafi opinion, but extend
the prohibition to countable items as weIl.
63
The Zahir! jurists, as pointed out above, limit the riba prohibition
to the six named commodities on the basis of their rejection of qiyis as a
valid source of law. Therefore the identification of the 'illa is irrelevant
for them. Extension of the commodities is, however, possible for them
through the implications of the meanings.
The above summary ofjuristic opinion on the identification of the
'illa of the 1}.uhn of ribi prohibition is a simplified version of the
otherwise more detailed and complex treatment of the subject by the
fuqahi'.
2.9 The Consequence
FinaUy, the Traditional Model recognizes the directly named
ecclesiastical punishments for the violation of the riba prohibition,
prescribed directly in the Qur'an as Insanity, Extermination, War from
God, Infidelity, and etemal HeU Fire. There are no primary-sourced
prescribed temporal punishments. However, the Model incorporates what
is reported to be a set of secondary-sourced temporal punishments. Based
on the last words of the verse Q. 2:279, juristic opinion reportedly
provides for exercise of compulsion on the offender to abandon riba, and
in case of persistence, the majority of such opinion caUs for his
imprisonment till abandonment, while even his execution is caUed for in
the opinion of Ibn'Abbas, Basan al-Ba~r!, and Ibn S'irln.88
88 Gauhar, Translations From The Quran , 136.
64
2.10 Contemporary Juridical Support
In the contemporary juridical scenario, in essence, in terms of the
banning of aIl forms of financial excess, the Traditional Model finds
recent full support, among others, in the rulings of the Jeddah-based Fiqh
Academy of the Organization of Islamic Conference (OIC) and in the
judgements of the Pakistan Federal Shariah Court (FSC) and the Shariah
Appellate Bench of the Pakistan Supreme Court (PSC). The Organization
of Islamic Conference in its 1986 ruling, only recommendatory and not
juridically binding, had declared aIl forms of interest as prohibited in
Islam. 89 The Pakistan Federal Shariah Court in 1991 had dec1ared many
laws of Pakistan "repugnant to the injunctions of Islam ... for providing
for interest which falls within the definition of ribi clearly prohibited by
the Holy Qur'an." 90 Th'e Shariah Appe11ate Bench of the Pakistan
Supreme Court in 1999, dismissing the appeal of the Federation of
Pakistan, upheld the Pakistan Federal Shariah Court 1991 judgement and
declared a11 forms of interest to be strictly prohibited by the Holy Qur'an
and the Sunna. 91
X9 Fiqh Academy, Organization Islamic Conference, Jeddah.90 Judgement of the Pakistan Federal Shari'ah Court ofNovember 14, 1991. Reproduced. (Lahore:Pakistan Law Digest (PLD) Publishers, 1992).91 Judgement of the Shari'ah Appellate Bench of Pakistan Supreme of December 23, 1999. (Islamabad:Advanced Legal Studies Institute, (www.nyazee.com). 2000), 532.
65
3. The Muslim Liberal Hermeneutical Model
3.1 The Proponents
The Liberal Model has the support of at 1east two classic scholars
and many contemporary exegetes and scholars.
Prominent among these are the classic scho1ar Ibn 'Abbas (b. 622
CE), Olle or the most prominent Companions of the Prophet, who is
claimed to have dispensed with the ribi al-facjl prohibition, on the basis
of aJ:!.otbt.r~ladJthof the Holy Prophet declarlng ribi al-nasJ'ah as th~
only ribii.92 The other classic scholar supporting the liberal group is Ibn
HI-Qayyim (d. 75111350).
Prominent contemporary scholars in this group are Mu1}.ammad
'Abdul1 ,(d. 1905), Rashid Riq.ii (d. 1935), Abü Zahrah (d. 1974), 'Abd ar
Razûk as-8anhurl (d. 1971), Ibrailim Zald ai-Badawi , and Fazlur
Ral}miin (d. 1988), to name but a few.
3.2 The Model
The Muslim Liberal Madel cannot correctly be 1abeled as a
homogenous set of thought. Tt is an umbrella category incorporating a
diversity of opinion of contemporary scho1ars divided roughly a10ng the
lines of the two main constituent sub-groups, the contemporary religious
scho1ars and the contemporary secular scholars, and further compounded
by individual differences of opinion within each of the two sub-groups.
6n
The representative views of the group contained in the depositions of Ibn
'Abbas, Ibn al-Qayyim, Muhammad 'Abduh, RashldRiq.a-, Abii Zahrah,
and as-Sanhiiii have been presented above in Chapter II. While the
contemporary religious group has the advantage of familiarity, but the
privilege of disagreement, with the methods of the Traditional group, the
contemporary secular group has only the privilege of disagreement. In
this Model, then, the only point of agreement is disagreement with the
Traditional Model. The Model seeks curtailment, dispensation and
circumvention of the prohibition. Another binding factor in the
contemporary Liberal Model is the obsessive concem with the sanctity of
modemity. The Liberal Model derives its guiding principles from the
historieal context but tempers them by the modem context. In fact, it
treats the historical context as the cradle and the modem context as the
grave for the derived principles.
As will be shown below, the Liberal Model differs from the
Traditional Model on many aspects of the prohibition. These differences
include the modifiability, the source, the binding force, the coverage and
the dispensability of the prohibition.
As explained above, this Model represents a departure from the
Traditional Mode!. Renee, points on which this Model does not record
any dissent, although notpositively stated by it, are regarded as being
common between the two Models and are presented accordingly.
92 Ibn Rushd, Bidayat af-MujtafJid wa-NilJiiyat af-Muqta$id trans. Irnran Ahsan Khan Nyazee, The
67
3.3 The Method
The method of Interpretation employed by the contemporary
scholars and their treatment of the sources differs from that of the
classical fuqahi,.93 In complete disregard of, or non-familiarity with,
ll$Ü] al-Bqh, they treat the Qur'an and the Sunna as two separate,
independent sources, with the Qur'an as the primary source and the
Sunna as the secondary, non-complementary source.94 This
characterization of the Sunna as a non-complementary source carries
with it an unsupportable assertion of a lesserbinding. force for the Sunna.
Thus they interpret the prohibition of riba as a dual, double-sourced
prohibition. They maintain that only the so-called Qur'anic ribi a]-
nasl'ah is the original prohibition sourced in the Qur'an. For them it is
the Qur'anic or Primary prohibition, implying a greater binding force.
According to them the so-called Sunnaic ribi al-fag] is not sourced in the
Qur'an. It is a later extension by the Prophet of the original Qur'ànic
prohibition of ribi al-nasl'ah and is sourced in the ribawl commodities
iJadIth. It is thus a Sunnaic or Secondary prohibition, implying a lesser
binding force.
DistinguishedJurist's Primer. 2 vols. (Reading: Gamet Publishing, 1994), vol. II, 158.93 Nyazee, The Concept ofRibi andls/amic Banking, 8.
68
3.4 The Meaning and The Application
Like the Traditional Model, the Liberal Model also employs the
literaI meaning of the term ribâ as "excess", and, similarly, the various
shades of meaning and applications of this term used in the Qur'an, as
illustrated above, do not find any treatment in this model as weIl. In the
evolution of this Model too, the focus of attention immediately narrows
down to only the contextual financialleconomic connotation of the term
- usury/interest and other commodity excess.
3.5 The Coverage ofthe Prohibition
The liberal scholars have a point of agreement with the classical
fuqahi' that the prohibition, in its technical sense, applies to
financial/economic increase and therefore both ribi aJ-nasl'ah and ribi aJ
facjl are prohibited. But they have a point of disagreement with the
traditionalists on the source and the resulting binding force of the
prohibition that serves to narrow down the coverage of the prohibition.
Thus even within this narrow financialleconomic connotation, there is a
further narrowing of scope. The model treats the Sunnaic ribi aJ-facjl as
altogether excludable from the coverage of the prohibition on the basis
of the doctrine of Sunnaic lesser binding force. Even within what is
termed by them as the ribi of the Qur'an, the Liberal Model, as a group,
relying on the contextuality of one of the Qur'anic injunctions, and on
94 Ibid., 11-13.
69
the economic rationale for the prohibition, limits the prohibition to
compound interest and interest on consumption loans, but that too
dispensable on the basis of the doctrine ofnecessity. It exempts from the
prohibition simple interest and interest on production loans as being non
exploitative. Another view regards the prohibition as being applicable to
usury and not to interest Le. only to the modern context of excessive
interest, and not to the modern day bank interest.
For the limitation of the prohibition to compound interest,
reliance is placed on the "ribii doubled and redoubled" verse of the
Qur' an, thus employing the specificity of the verse and ignoring the
generality of the other ribii prohibitory verses which employ a generic
usage of the term ribii.
3.6 The Treatment of the Prohibition
The Model treats this narrowly defined financial excess as not
strictly 'prohibited. One shade of opinion treats the prohibitory
injunctions and their supporting verses as mlltashiibihiit and not as
mu1;Jkamiit. Even when they do not subscribe ta this view, they treat the
prohibition as dispensable. They consider the prohibition on simple
interest and interest on production loans as dispensable on the basis of
rationale (non-exploitative). They consider the prohibition on ribii al-facjl,
if not altogether exdudable, then at least dispensable on the basis of the
doctrine of need. Finally, they consider the prohibition on compound
70
interest or usury and on interest on consumption loans as dispensable on
the basis of the doctrine of necessity. One extreme opinion even regards
the ribii al-jiil;.iliyya as allowed in case of 'pressing necessity' and ribii al
fat/l and ribii al-nasl'ah as allowed in case ofneed.95
The Model recognizes benignancy of the charge, mutual
agreement of the parties, and necessity as grounds for inapplicability of
the prohibition. Tt regards the prohibition itself as subject to
interpretation and modification.
3.7 The Rationale (1Jilanah)
Operating within the confines of the Traditional Model, the
Liberal Model also contextually employs the economic, social, moral and
spiritual rationale as the explanation for the prohibition. But, as a major
point of departure, adding precision and refinement to the concept, the
LiberaIs make a very effective use of the catchall term 'exploitation'. In
dealing with this rationale of exploitation, the Model pointedly raises the
question of the benignancy of the charge, and of the presence of mutual
agreement of the parties. Tt makes the obvious, simple, yet powerful
point that if the charge is benign and/or mutually agreed, it is not
exploitative and, if exploitation is the rationale for the prohibition then,
whatever is non-exploitative is not covered by the prohibition. This line
95 Sanhürl, Ma~iidir al-I:faqq, ml. III, 237.
71
of argumentation accentuates the need for the discovery of the true
rationale for the divine prohibition.
3.8 The Underlying Cause (ratio legis: 'illa)
The Liberal Model has not identified the ratio legis (' illa) of the
ribawl commodities on the pattern adopted by the Traditional Model. It
appears that the Liberal Model makes no distl;nction between the
concepts of J;.ihnah and 'ilia. It uses the two terms interchangeably, and
as shown above, employs the concept of exploitation to refer to J;.ihnah
and 'ilia both. However in one shade of liberal interpretation, to coin a
new term, "conformity with historieal praetiee" appears to have been
used as the 'ilia. This view regards the historieal praetiee of ribi aI
jiihiliyya as the only prohibited ribi and contends that, only what
conforms today to the historical practice of ribi al-jiihiliyya is prohibited,
and whatever does not eonform to this praetiee is exempted.
3.9 The Consequence
The Liberal Model, like the Traditional Model, recognizes the
directly named ecclesiastieal punishments for the human violation of the
ribi prohibition. There is no room for interpretation or disagreement on
these punishments -- Insanity, Extermination, War from God, Infidelity,
and eternal HeU Fire. These are clearly and direetly ordained in the
Qur'an; They also recognize that there are no primary-sourced preseribed
72
temporal punishments and the secondary-sourced punishments were
advocated only by a minority of the Traditional group.
3.10 Contemporary Juridical Support
In the contemporary juridical scenario, in terms of liberalizing the
riba prohibition, support for the Liberal Model cornes chiefly from the
civillegislation ofmany Muslim countries themselves.
73
CHAPTERIV
CONCLUSION
In the light of the meaning, the regulatory framework and the
structural and hermeneutical aspects of ribi prohibition examined above,
a critical hermeneutical evaluation of the Muslim Traditional and the
Liberal Models in terms of their employment of the meaning, application,
rationale, underlying cause and consequence of ribâ, can now be
attempted in order to summarize the hermeneutical imbalance leading to
the concluding recommendation.
A survey of the exegetical literature indicates that there is
unanimity of opinion amongst the traditional and liberal exegetes and
jurists on the literaI and lexical meaning of riba as "excess, growth,
addition." Thus, whHe there is no apparent Arabic linguistic problem, the
Models either do not recognize at aIl or, more simply, do not express the
intrinsic distinguishing characteristic of the "excess, growth, addition"
which is being referred to. The Models do not answer sorne fundamental
questions raised by many scholars. Does riba refer to every, or only to a
specifie, type of "excess, growth, addition"? What sets riba apart from
ba;!? What makes riba iJarim and bay' iJalal! And above aIl, what is it
that attracts Satanic insanity for confusing the two terms with one
another? Surely, a simple inability to comprehend the commercial
distinction between two seemingly commercial terms can easily be a case
74
of ignorance of commercial knowledge, and cannot be so serious as to be
equated with Satanic behavior and punishable with etemal HeU Fire.
Conversely, in the modem vemacular, a d~gree in commerce, finance, or
law, of itself, cannot be a passport to Heaven. And surely, indulgence in
one seemingly commercial activity cannot be such a grave sin as to
imperil such grave punishment as etemal Hell Fire. What, then, is the
veiled layer of meaning beyond the apparent commercial meaning that
attracts such punishment? As will be shown below the absence in the
Models of an adequate treatment of the above questions has a very
profound bearing on the very meaning of the term w~th all the consequent
misconceptions, which is what makes riba appear to be the supreme of aU
the 'Quaestiones Vexatae' of Islamic Law. This lack of precision of
meaning represents the first hermeneutical flaw in the Models.
In spite of the above-referred agreement on the lexical meaning of
riba as "excess, growth, addition", the focus of attention of both the
traditional and the liberal exegetes and jurists immediately narrows down
to the economic/financial application of the term in varying degrees as
shown above. Accordingly, attempts are made to confine the term to
economic/financial excess arising out of delay or estimation, and to
equate it with the English language terms of usury or interest or both. In
these Models, this confinement of the application of riba to only the
economic/financial aspect of human activity is quite understandable in
the light of at least two factors. Firstly, in the historical context of
75
Revelation (the mercantile character of the immediate recipients - the
Quraysh- and of their habitat - Mecca), the commerciaVfinancial
/economic aspect was the most readily discernable, identifiable and
prevalent candidate for the first application of the term ribà as a process
of growth. Secondly, on a more specifie plane, the Qur'an, following its
contextual approach, uses the term ribà in its economic application when
it refers to a prevalent Arab financial practice of 'riba doubling and
redoubling' (3: 130), or conceptually, when it contrasts riba with $adaqa
(2:276) and with zakit (30:39). The Qur'an also contrasts ribà with bay'
(2:275). This contrast appears, at first sight, to be clearly, and only, a
further economic application, and serves as the hermeneutic foundation
of the current riba models. But this ribilbay' contrast does not have the
exclusive economic connotation that is claimed for it. This contrast has a
very profound esoteric connotation, which, as will be expounded later, is
the hermeneutic foundation of the Qur'anic/SunnaicModel. However,
even setting aside this question ofinterpretation ofQ. 2:275, in any case,
still there is ample Qur'anic source material and Arab customary usage to
link riba with human economic activity. However, this does not mean
that ribà, with its generic meaning of "excess, growth, addition", is
confined to the economic sphere only. As a matter of fact the Qur'anic
usage of the term, as detailed above, conveys at least six different shades
of meaning which identify the presence of the process of ribà in many
other spheres.
76
FUlthermore, the Prophetie iJadith, equating ribâ with incest,
quoted above, refers to the existence of seventy different kinds of ribâ.
Clearly, not àll these kinds belOllg exclusively to the economic sphere.
Even within this narro,,,, financial/economic applicaticn, the
Liberal thought attempts to dowugt'ade or reject sorne applkations
which the Traditional thought regards as covered by the prohIbition.
Fir~tly, the Liberal downgrading of the n'bi al-faq! as a secondary lesser
binding prohibition is not defensible either proeedurally or
eonceptually. Procedurally, it is in violation of u$ül al-fiqh for not
treating tte Qur'an and the SU1lIlél as ane hinding source. Conceprually,
downgrading the ribi al-fagl nms counter to the very essence of the
r,oncept of riba . Secondly, the Liberal attempt to altogether exclude
simple interest from the prohibition net is ehallengeable. For the
limitation of the prohibition to compound interest/usury only, l'eliance
is placed by them on the "riba doubled and redoubled" verse of the
QUl"an (3: 130). Theil' argument is based on the specificity of the verse
and ignores the generality of the other rib7J prohibitory verses which
employa generic usage of the term Iibi:. The counter-argument eould be
advauced that had it been the Divine purpose to prohibit only a specifie
praetice, then the specifie Q. 3: 130 suffices for the purpose. What then
is the t~'lIget of the other generie-meaning and comparative-meaning
verses? What their interpretation ignores i8 the more plausible position
that the Qur'anie prohibition being generie is necessarily also
77
comprehensive and that Q. 3: 130 is only one example of a covered
practice familiar to the immediate audience of the Revelation. In fact,
the nature and the severity of the prescribed punishment in Sürat af
Baqarah strongly suggests that the coverbge and the depth of the
prohibition go even further - much beyond the mere entire financial and
economic spheres. The authentic l;adlth equating ribâ with incest with
onels own mother is very suggestive of the broader import of the term
ribi and the rationale of its strict prohibition.
The lack of explicit recognition that ribâ application covers the
financial spectrum in its entirety and even goes far beyond the economic
sphere is the major factor which in the CUITent Models prevents the
synthesis of meaning, application, rationale, underlying cause and
consequence. This limitation of application represents the second
hermeneutical flaw in the Models.
The Qur'an and the lfadith, while very emphatic on ribâ
prohibition, and very cIear on the nature and severity of the eccIesiastical
punishment for its violation, are explicitly and completely silent on the
rationale (l;ilanah) underlying the prohibition and the punishment. It has
been, therefore, left to the jurists to ask what ribiis, why it is prohibited,
and how it is punished.
In Hne with their restricted economic paradigm of riba, the
exegetes have picked up the readily discemible economic connotation
cIues from the Qur'an when it contrasts ribâ with bay' and ribâ with
78
zakitl.sadaqa. Accordingly, riba is treated as the opposite of bay' from an
economic and social viewpoint and as the opposite of zakit/~adaqafrom
a related moral and spiritual viewpoint. Consequent1y, aIl the benefits
and virtues of bay' and zakit/~adaqa are seen as absent from ribii. Based
on this model, the exegetes have come up with a number of negative
effects of the practice of riba and they treat these as the rationale for the
Divine prohibition of riba. According to them, these negative effects of
riba under the economic and social category, include exploitation,
inequity, injustice, wealth concentration, economic depression/crisis, and
social resentment/anger leading to revolution, and under the moral and
spiritual category, include se1fishness, miserliness, callousness,
ungratefulness, greediness, avarice, meanness, hatred, resentment, spite
and jealousy.
While the exegetes have demonstrated the negative effects of riba
practice from the economic and the related social, moral, and spiritual
standpoints, very thoroughly, forcefully and convincingly, yet they have
not done it conclusively. They have not even attempted to prove that
these negative effects of riba are the necessary and the only concomitants
of riba, Le. riba cannot result in any thing but these stated negative
effects and that riba can never have any positive effects. While it is very
clear and has beenamply explained by them, what human effects riba as
an instrument can, and does, have in the hands of an oppressive person,
the exegetes have not even asked, let alone answered, the question what
79
human effects riba as an instrument can, and does, have in the hands of a
benign person? And, in the light of the answer to this question, what then
is the real rationale for the strict prohibition of riba and the severe
ecclesiastical punishment for its violation? They have not answered the
logical question why, if exploitation is the prohibition rationale, non
exploitative practices - involving benign charge and/or mutual consent
are also c1assed as prohibited? And, they have also not even asked the
question of whether, how and why riba is applicable to other than
economiC spheres ofhuman creative activity?
These unanswered questions are further compounded by an
inadequate interpretation of the connotation of 'interaction of
similarity/dissimilarity' in the so-called ribawl commodities 1}.adith and
by virtually no explanation of the ratio legis ('illa) in the oft-quoted riba
/incest equivalence 1}.adith. This lack of identification of the rationale for
the prohibition constitutes the third hermeneutic flaw in the Models.
The derivation and identification of 'ilal (underlying causes) of
ribi prohibition has received substantial coverage particularly in the
traditional model, as examined in detail in Chapter III. This derivation
represents an impressive intellectual effort, but is narrowly conceived by
definition and design. Both models seek the tilla in the context of the
named six commodities only to extend the prohibition to other
commodities. This could be termed as a micro-level approach in the
economic sphere as against a macro-Ievel approach in the universal
80
sphere. The juristic Traditional Model seeks the distinctive
characteristics of the named six commodities but not the distinctive
characteristic of ribii itself. It ignores the essence and explores the
manifestations of the prohibition. It looks at the eharacteristics not of
ribibut of what ribii is reflected through. It diagnoses not the disease but
the patients. It concentrates on the exoteric micro level indicators of
similarity, weighability, countability, measurability, storability,
valuability and edibility of the commodities, but not the esoteric
distinguishability ofribiithat runs through the commodities. On the other
hand, the scholarly Liberal Model as pointed out above does not have a
systematic approach to the whole concept of 1J.ikmah and 'illa of ribii
prohibition.
The employment of systematic, but exoteric micro-Ievel
approach in the Traditional Model and non-systematic approach in the
Liberal Model for 'i1la derivation constitutes the fourth hermeneutical
flaw in the Models.
As indicated above, the directly named punishments, for the
violation of the riba prohibition - Insanity, Extermination, War from
God, Infidelity, and HeU Fire - aU are ecclesiastical in nature. There are
no primary-sourced prescribed temporal punishments. There is a minority
secondary-sourced punishment of death.
This punitive aspect of riba prohibition presents an ijtihiidic
challenge which in the CUITent models has not received the attention that
81
it caUs for. The dilemma to be resolved is that riba is seen as a temporal
activity, and indulgence in it is regarded as a sin. The explicitly ordained
punishment for this temporal violation is ecclesiastical only, and, this
ecclesiastical punishment is not commensurate with riba seen only as a
temporal violation. Is the punishment, then, too harsh, or is the violation
more than temporal? The punishment, being divinely ordained, cannot be
unjust. Our perception ofriba must then be at fault.
The CUITent models do not address this dilemma. They do not
respond to the following specifie questions.
Firstly, riba is seen as a temporal activity and part of the fiqh a1
mu'iimalit but the primary-sourced prescribed punishments are aIl
ecclesiastical and not temporal in nature. As noted above, there is
reported to be a set of minority secondary-sourced temporal punishments,
but hardly any evidence of their application. However, regardless of the
validity ofthis minority juridical opinion, these temporal punishments do
not and cannot replace or abrogate the ecclesiastical punishments that are
expressly divinely ordained. The question then still remains why
ecclesiastical punishments for temporal violations?
Secondly, the prescribed ecclesiastical punishments represent the
most extreme end of the punitive spectrum, which is certainly not
commensurate with riba seen only as a violation of human economic and
social rights. Why is there such grave punishment for violation of one
(economic/social) component of 1;uqzïq a1- 'ibid when violation of any
82
other of its components does not attract such punishment? These
ecclesiastical punishments are by themselves evidence and proofthat riba
indulgence must involve a far graver sin. Even the reported juristic
opinion-based punishment of execution for riba indulgence is similarly
harsh and incompatible with the economie/social connotation as the only
manifestation.
No intellectually defensible attempt appears to have been made to
evaluate the so far humanly "discovered" rationale in juxtaposition with
the divinely ordained punishment. One unsatisfactory attempt at
reconciliation hasinvolved the raising of the status of the violation by
proclaiming that the nature of the Divine punishments shows the
importance that God attaches to human economic rights.
These unresolved points of reconciliation between the rationale and
the punishment are a further, the fifth hermeneutic flaw in the current
Models.
Based on the above analysis, the underlying hermeneutic flaw of
the Traditional and the Liberal Models of riba, can be sununed up as one
of imbalance. There is imbalance between the meaning and the
application, imbalance betweell the applIcation and the rationale,
imbalance between the rationale and the ullderlying cause, and finally
imbalance between aIl these variables and the consequence. The
hermeneutical problem is that these riba prohibition models start with the
83
generic meaning of the term, narrow it down to one sphere of activity by
relying only on the historicity, contextuality and specificity of meaning,
search for the prohibition rationale and the underlying cause in this
narrowed context, attempt to promulgate the prohibition on the strength
of this narrowed context rationale, and make no meaningful attempt to
reconcHe the rationale with the consequence. This skewness of the
models is clearly in need of alignment through the removal of this
imbalance.
This internaI balancing of the riba model requires exegetical and
juristic research to discover from the Qur'an/Sunna itself a meaning of
riba, beyond the lexical and the contextual, which is intrinsic and
distinguishing in terms of its uniqueness (tamylz), and then to formulate
a definition ofriba which in turn should represent a complete synthesis of
the meaning, the application, the rationale and the underlying cause of
the prohibition, and the consequence of violation of the prohibition.
Without this delineation and synthesis, confusion about the concept will
persist, hindering the juridical transformation from interpretation to
implementation.
84
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