Islamic Studies (Islamabad) 3:1 (1964)

R I B 2 AND INTEREST*
FAZLUR R A H M A N

Note :Ribiiis usually translated in Urdu by the word Wd. which is

of Persian origin and literally means 'profit'. its antonym being ziyiSn.
Siid is not synonymous with the Qur'anic term ribii, but is synony-
mous with t h e Arabic word ribh. In fact, any attempt t o translate t h e
Qur'anic term. 'ribil' in any language, is not only futile, b u t is also the
source of much confused thinking on the subject.-(F. R.)

INTRODUCTION
The literal meaning of rib5 ( 4J 6 v (J ), as illustrated by the
Qur'snic usage, is :
(1) t o grow, e.g.

-
"And thou beholdest the earth barren, then when
We send down water upon it, it quickens and
grows.. .."(XXII : 5);
(ii) t o increase ; t o prosper;
(yL, : l- hJ1.d
~ l i & d&*J
11
God destroys riba, but makes alms prosper" (11 : 276) ;
&
- $i Jlpl j 13J
- ir.$TL,
(v 9 :rJJl)
I.
And whatever you invest in ribii so that it may
inmease upon the people's wealth, it increases not with
God ;" (XXX : 39);
(iii) t o rise (for example of a hill), as
( 0 . :d.+9J ) a -m bib
"And W e gave them refuge upon a height. . ."
(XXIII :~
50);
*This is the translation by Mazheruddin Siddiqi of an Urdu article by the
author entitled Ta3qig-i Ribii. which was published in the month1j Urdu journal
-
of this Institute. Fikr-o N q a r . i/5 (November. 1963).-(Ed.)

© Dr Muhammad Hamidullah Library, IIU, Islamabad. http://iri.iiu.edu.pk/

 RIBW AND INTEREST

"As the likeness of a garden upon a h i l l . . ."

(I1 : 265) ;
( i v ) to swell (for example, foam), as
(1 :~ ~ 3Ll
-1,) hj &JJ
3 j U
"Then the torrent carried a swelling scum ;"
(XI11 : 17) ;
(v) to nurture; to raise (a child); as
( ~ : v &W '&) - LJ h-,l
&J
6I
My Lord, have mercy upon them (i.e. my parents)
as they raised me up when I was little!" (XVII :24);
* :dp9I) iJJ
(I (ii,
'&j +I
-
I6
Did we not raise thee amongst us as a child ? "
(XXVI : 18) ;
(yi) augmentation. increase in power, etc., as

44
He seized them with a surpassing grip. .."
(LXIX : 10);
(qy :&dl) -&I
-
&4
. @ -&I d,s3 dl
&,I
I1
That one nation be more powerful than another
nation. . - -"(XVI : 92).
From the lexical meaning given above, the technical meaning
of the term 'ribii' is derived as discussed below.
W e shall first take up the nature of ribii prohibited by the
Qur'an. In the second section we shall turn to the legal Hadit&
materials concerning the extension of the Qur'anic term riba to
different forms of exchange and transactions. This is justified
on the ground that all the fuqahd' are agreed that these
two fall into distinct categories : indeed, the one has been called
"ribii al-Qur'iin (ribii of the Qur'an)" and the other "rib~ial-Hadit&
(rib5 of the Hadith)" or "ribii al-fad1 (ribii of excess)". In the
third section we shall underline the role of bank-interest in the
present-day economy, and in the last section we shall record our
conclusions based on these considerations and materials.
 FAZLUR RAHMAN 3

6'
And whatever you invest by way of riba so that it may
increase upon people's wealth, increases not with God ; but
what you give by way of zakah seeking the pleasure of God,
those-they receive recompense manifold" (XXX : 39).
This was revealed in Mecca for it occurs in the Sarah al-Rzim.
which is wholly a Meccan revelation. The inner evidence of the
opening verses of this Sarah indicates that i t was revealed during
the fourth or fifth year of the Prophet's Mission, or even earlier,
for the Persians began defeating the Romans in "the neigbouring
lands" ( &YI $1 ), i.e. Syria and Palestine, referred to in these
verses, in 611 A.C. (i.e. the first year of the Prophet's Mission) and
with the fall of Constantinople in 614 A.c. reached its culmination
(i.e. year 4 of the Prophet's Mission).' I t is not at a11 surprising
that ribti is condemned in so earIy a reveIation : rather the absence
of such early condemnation could have not only been surprising
but also contrary to the wisdom of the Qur'an. The Meccan verses
of the Qur'zn are replete with the denunciation of the economic
injustice of contemporary Meccan society, the profiteering and
stinginess of the rich. and their unethical commercial practices such
as cheating in the weight and measurements, etc., how is it possible
then that the Qur'zn would have failed to condemn an economic
evil such as ribii ? However, here it passes onIy a moral stricture
on riba ; i t does not yet decIare it legally prohibited for Islam had
not yet attained political power by which i t could eradicate this
evil.
When Islam became politically dominant after the Prophet's
migration to Medina, ribe was categorically prohibited in the
foIlowing words of the Medinese Sarah Al-'lmrzin :
Al I+! 3 i i s b UAL+! 13Jl lfib Y I p T 3.U &I

"0you who believe, do not consume ribii with continued

redoubling and protect yourselves from God, perchance you
may be blissful" (I11 : 1%).
4 RZBAAND INTEREST
This prohibition was later re-asserted in very emphatic terms
accompanied by a threat in Siirah al-Baqarah (I1 : 274-80).

IL
Those who consume riba shall not rise except like the one
who has been struck by the Devil's touch. This is because they
say that selling and ribii-making are one and the same thing,
whereas God has made selling lawful and has forbidden ribii.
Whosoever receives an admonition from his Lord and desists,
he shall have his past gains, and his affair is committed t o God;
but whosoever reverts--those are the inhabitants of the
Fire, therein dwelling for ever. God destroys ribii but makes
alms prosper. God loves not any guilty ingrate. [Butl those
who believe and do deeds of righteousness, and perform the
prayer, and pay the alms--their reward awaits them with
their Lord, and no fear shall be on them, neither shall they
grieve. 0 ye who believe ! protect yourselves from God and
remit what is left of riba if ye be faithful. If ye do not. be
prepared for war from God and His Prophet : but if ye desist,
ye shall receive back your capital without doing injustice or
suffering injustice. If. however, anyone is in difficulties. let
there be a delay till he is able t o pay, although it is better for
ye t o remit if ye only knew" (I1 : 27480).
These Qur'anic verses and their context show that these are
the last of the verses prohibiting ribii. In some Traditions
this fact was mis-stated and it was claimed that these were
the last of all the Qur'anic verses revealed to the Prophet. This
was still further extended and in a Tradition the statement was
attributed to the Caliph 'Umar b. a l - a a t t ~ bthat as the Qur'iinic
injunction regarding the prohibition of riba came in the very end
(of the revelation) and since the Prophet did not live long enough
 FAZLUR RAHM A N 5

after that revelation to spell out fully as to what were the con-
~tituentelements of ribii we should, therefore. not only avoid ribii
but also rZbah (doubtful transactions). W e shall examine these
Traditions in the second section of this study. Here we shall
endeavourto understand the ribis of the Qur'iin in the light of the
established maxim : "ik..! 3531 (one part of the Qur'an
explains another)".
The verse bf Sarah Al-'lrnriin categorically prohibiting riba
occupies the central place in this series of Qur'anic verses ; that of
Sarah al-Rtim was its prologue, while those of Sarah akBaqarah
were its epilogue. If we examine these verses in their chronological
order, we may conclude that :
(i) the riba of the pre-Islamic days was a system whereby the
6 I
principal sum was doubled and redoubled (-&L UGI)
through a usurious process ;
(ii) because of this process of doubling and redouhling the
principal, the Qur'zn refused to admit that riba' was a
kind of fair business transaction; and
(iii) while permitting the commercial profit, the Qur'gn
encouraged the spirit of co-operation as opposed to that
of profiteering.
The historical evidence that we possess also corroborates the
above conclusions.
The Muwa$$a'of Imam Malik records on the authority of Zayd
b. Aslam as follows :

(In the pre-Islamic days ribu operated in this manner : if

a man owed another a debt. at the time of its maturity the
creditor would ask the debtor : 'Will you pay up or will you
increase ?' ["am turbT*-from ribnl. If the latter paid up.
the creditor received back the sum ; otherwise the principal
was increased on the stipulation of a further term.)
Abu'l A'la Mawdndi, the chief of the Jama'at-i Isl~mi,assumes
that for the first term the credit was granted free of interests4 But
one fails to understand how this is intelligible in a social set-up
such as the commercial Meccan society or the Jewish Medinese
society, where the riba system was quite normal. How could the
usurers, who were keen on d o u b h g and redoubling their capital,
 forgo the initial interest by way of charity, so to say ?
Mufti Muhammad S a f i ' expresses an opinion contrary t o that
of Mawdildi. H e says: "The prevailing practice in Arabia was that
a certain amount of money was advanced for a fixed period a t a
6xed rate of interest. If the debtor paid the loan within the pre-
scribed time the matter was settled on the payment of interest ;
otherwise he had to pay more interest.'
However, the above-quoted statement of Zayd b. Aslam,
which is recorded not only by Mdik but also by al-Bayhaqi,
Razin and other Muhaddithiin and fuqaha', shows that the initial
interest itself was not usurious and was, therefore, not considered
ribti.
What made it ribii was the increase in capital that raised the
principal several-fold by continued redoubling. The situation,
therefore, was that a part of wealth was loaned initially on interest
for a definite period but on the expiry of that period. in case the
debtor was unable to pay. the term of payment was extended with
an enormous increase in the principal amount. It often happened
that. where big sums were involved. the debtor went on paying
interest alone in instalments and yet could not pay off even
the usurious interest. let alone being able to return the principal.
Al-Tabari records reports where whole tribes. e.g. that of Bana
Mughirah, were under the weight of usurious debts t o one another
and when they became Muslims their mutual relations became
difficult. Indeed, the very words of the Qur'an "Id1 3 3 L bjj "
(remit what remains of ribii)" make the above situation abundantly
clear.'
As mentioned above. the verse of Sarah Al-'Imriin occupies the
central and fundamental position in the series of verses relating to
ribti. In this verse the Sari'ah-value. i.e., what the Muslim jurists
call "the 'ilkzt al-gukm" underlying the banning of ribii. is explicitly
mentioned t o be its becoming doubled and redoubled ("'*iisL LW).
This contention of ours is supported by the following two
famous commentators of the second generation of Islam :
(1) Mujiihid.-Al-Tabari has recorded the following from
Mu jahid :
*I 3 U+ I ~ PIL L J)t UL JU , + ijl -Y MA
WI IXL-Y I+T&II&I~ &,j.rl&j.~.te~ e-
7- '4Wl bj J U &L;r4 liGl
 FAZLUR RAHMAN 7

(Muhammad b.'Amr reported t o us. he said that Abfi 'Asim

related to him from 'ha, he from Ibn Aba Najih, who said that
concerning the Qur'anic verse '0 you who believe, do not
devour riba with continued re-doubling', Mujshid said, 'This is
the ribn of pre-Islamic days'.)
(2) Zayd b. Aslam.-In the same authoritative commentary of
the Qur'sn, a long statement of the famous tabi'z' ("Successor")
commentator, Zayd b. Aslam, is recorded which shows in detail how
the process of "continued redoubling" went on in connection with
the borrowing of cattle. as well as money. Tkis report is summed up
in these words :

(The ribir of pre-Islamic days consisted in its doubling and

redoubling in terms of cash [in the case of borrowed money]
and age [in the case of borrowed cattle].)
In short, the ribii of pre-Islamic days, which was categorically
declared haram by the Qur'sn, so that those who indulged in it
were threatened with war from God and His Prophet, was of an
atrocious kind and went on multiplsing in a manner that the poor
debtor, in spite of his regular payments, could not pay off the
usurious interest let alone the capital.
A natural question arises here, viz.. if ribii is only that form of
usurious transaction which has been described above and if only
this form is banned, then why is i t that, as an effect of the ribii-
ordinance of the Qur'an, all interest seems to have been abolished
as is, indeed, testified by historical evidence ? The answer to this is
that we do not hold that in each and every given case of loan, the
capital was thus doubled and redoubled-indeed, there must
have been a great deal of variation in individual cases depend-
ing on circumstances, e.g. the nature of investment, the amount of
risk. etc. But what matters is that all these individual cases were
part of one ribii-system in whose nature i t was to be so exorbitantly
usurious. Therefore, what had to be banned was the system as
a whole, and hence no exceptions could be made ir. individual cases.
When the entire system was banned. the milder cases within that
system were also naturally abolished since the system itself was
tyrannical. I t cannot. therefore, be argued that since the Qur'in
abolished even the milder cases, it must be concluded that the
bank-interest of today also stands condemned. This is because the
 bank-interest of today is a separate kind of system (see Sections,
111, I V and V below).

I1
-
R l B a AND HADiTH

Like alcohol, ribii was deeply ingrained in the life-texture

of the Arabs of pre-Islamic days. Indeed, commercially speaking,
it was much more deeply laid than alcohol. It meant a lucrative
business which brought quick and plentiful return t o tbe usurer.
That is why, while its prohibition, like that of liquor, was intro-
duced gradually, its denunciation was much more severe.
As mentioned above, the verse of Sarah aLRiim embodying its
first criticism was revealed during the early years of the Prophet's
Mission. This mild admonition was followed by a categorical
prohibition in the verse of Siirab Al-'lmriin and by severe threats
for the transgressors in the verses of Sarah al-Baqarah. The last two
series of verses must have been revealed during the early days
of the Prophet's stay a t Medina, but the bd&-material is against
this plausible surmise-and all misunderstandings and misconcep-
tions start from this point.
The most well-known Tradition on the subject in the ha&@-
literature is the one attributed t o the Caliph 'Umar, and runs as
follows :
+ls GI & AI JFj 31, 4 ~ & 1T ~ T J I JjiL ST 31
--%A13J 19s 1 4 2 4 (SJ *-+-- J
(The last verse t o be sent down was that on ribii. but God's
Messenger was taken away without having expounded it t o us ; so
leave aside ribii and ribah, i.e. whatever is doubtful.) This report is
recorded in the Musnad of Ahmad b. Hanbal, the Sunan of Ibn
Majah, Mu~annaf of Ibn Abi S a y b a h , Dalii'il al-Nubuwwah of
al-Bayhaqi and similar other compilations of the Mubaddi@iin
of the later p e r i ~ d . ~
In the JahSh of al-Bu!&ri there is a report ascribed to 'Abd
Allah b. 'Abbss, which narrates the same story, but in a somewhat
restricted sense. Al-BuBZri in his chapter on the "Last verses of
Siirah al-Baqarah" records as follows :
GI & &I& d$-+T +i JG b212)& al
 FAZLUR RAHMAN 9

(Ibn 'Abbss said : the last verse sent down t o the Prophet was
the verse on ribs.) First. it is surprising that the singular number
(ki) has been used twice for as many as seven verses. Secondly, in
the Kitiib al-Tafsir of his Sahih. where he has narrated the above
report, al-Bukhsri has also cited the following Tradition attributed
t o 'A'i&ah through four different chains of transmission :
i G~ d + Y 1 d'jU
A ,J, ~ . n f > l + J lj sp?l .s, ;
Il-pd I j SJ l+p f &Jl&
r ,&=) I& A1 &
(When the last verses of Sarah al-Baqarah concerning ribii
were sent down, the Messenger of God recited them t o the people
and prohibited the sale of liquor [as well]). Now, according t o this
Tradition. not only is 'A'i&ah silent on the verses in question being
the last revelation but by connecting them with the buying and
selling of liquor. she has furnished some basis for the assumption
that the verses might have been revealed around the year 4 A. H.
because, according t o the commonly accepted Traditions, liquor was
prohibited the same year. Further, in the same Kitiib al-Tafsir of
the Sahib of al-Buhiiri, another Companion of the Prophet, Bars'ah
L-
Azih, is reported t o have said :
a,;i,xJ-$s;rl j&&~lJi&+;~? :~.I>&i+i
12-;7' d3.
(The last verse t o be revealed was : 'They ask you for a pro-
nouncement. Say : God has pronounced for you concerning the
indirect heirs.. .' (IV : 177) and the last Stirah was Barii'ah).
If we look beyond this most celebrated source-book of hadi&,
we will find still more conflicting reports on this subject, the details
of which are given by al-Suyati in his al-ltqiin f i 'Ulnm al-Qur'an.13
Apart from the fact that the report attributed t o 'Umar has
been contradicted by SO many other reports (which in turn
contradict each other !), there are several other reasons why we
must reject this report.
(1) As mentioned above, the gradual prohibition of ribii started
during the early days of the Meccan period. That, in spite of these
early revelations. the Companions of the Prophet continued t o take
ribii until a few days before the death of the Prophet when Allah
had to threaten them with war from Himself and His Prophet,
would be a serious reflection on their character. Most probably it
was dge t o this apprehension that the word 'ribii' in the Meccan
 10 RIBA AND INTEREST
Sarah aLRiim had been defined as 'hadiyahl ('gift') by all the
classical commentators of the Qur'zn, such as al-Tabari. al-Baydawi,
al-Suyoti and others. A "permissible (haliil) ribii" has been
invented by these commentators and it has been asserted by them
that this verse relates t o that ribd !I4They are supported by
al-Bubari himself, who writes :
15-w A? -1 b &h &I 3 '21 &G b?$% )'
(In this verse "dl b,! %" means that if any person gives
a present to someone and in turn expects a better present, he will
not be rewarded by Allah.) W e find it difficult to subscribe to any
such constructions put on the basic terminology of the Qur'zn or
t o the drawing of any distinction between a haliil and a hariirn rib&
, Besides, as mentioned above (Section I), it would have been contrary
t o the wisdom of the Qur'sn, had it not denounced ribii with a view
t o reforming the Mammon-worshipping society of the commercial-
ised Mecca of the days of the Prophet.
(2) It simply cannot be accepted that the practice of ribii
which was censured so early and was ultimately denounced in such
unprecedented strong terms by the Qur'8n could not be adequately
explained by the Prophet due to shortage of time. Such an assump-
tion also goes against the claim of the Qur'an that-
(, :;dul)-+ && &-13 & J @ &I r_)?l
"Today I have perfected your Faith for you, and I have
completed My blessing upon you . . ." (V :3).
The Caliph 'Umar himself is reported t o have said that
the above verse was revealed on the day of 'Arafah during the Last
Pilgrimage of the Prophet.16 Now, if the verse on ribii was the last
revelation, the above verse must have preceded it, and, therefore,
it could not be claimed at that time that "the Faith was perfected".
I t is for this reason that al-Sxddi and some other commentators have
stated. "After the revelation of the verse '. . . &+J rd'
no verse was sent down relating to permission (hillah) and
prohibition (hurrnah)" "r IF Y 3 J% hJ+J> pJ" l7 -
In order t o explain away this contradiction, al-Tabafi has put
forward the plea that "the perfection of the Faith" mentioned
in this verse means that "on the occasion of the Last Pilgrimage
the Muslims had gained ascendancy in Mecca and the idolaters had
been eliminated from the Holy City".ls Any such construction put
on the verse which evidently relates to the content of the Prophet's
 FAZLUR RAHMAN 11

Mission is not a t all acceptable t o this writer. It is clear from such

commentaries that how detrimental certain well-known but un-
authentic can be t o the fundamental principles of the Faith.
(3) Another serious objection against this report is that i t
conflicts with the following verses of the Qur'iin :

"And for the evil-doing of the Jews, W e did forbid them

certain good things that were permitted t o them, and for their
barring many people from God's way, and for their taking ribn,
which was prohibited t o them. and for consuming the wealth of the
people with falsehood ; and, W e have prepared for the disbelievers
among them a dire chastisement" (IV : 160-61). Now the accusa-
tion of the Jews on the ground of taking riba was only possible and
consistent after riba had been actual!y eliminated from the Muslim
society itself ; otherwise the Jews would have certainly pointed t o
the Muslims and said, "et tu quoque". But the last remnants
of the Jewish tribes. the Bana Qurayzah. were wiped out from
Medina by the pear 5 A. H. immediately after the famous 'Battle of
the Trench'. Therefore. the accusation of the Jews could only have
taken place before the end of that year, and t h e ribii prohibition
for Muslims must have, therefore, ante-dated 5 A.H.
(4) As we have already explained, the verse of Sarah &
1 L
'Imriin: Do not consume ribii with continued redoubling" occupies
the central place in the series of revelations on the subject. Now
this fundamental vzrse must have been revealed just after the
Battle of Uhud, because this verse is immediately preceded
as well as followed by the verses that describe the Muslims' defeat
a t Q u d , analyse the causes and consequences of this reverse and
suggest ways and means so that the tragedy might not be repeated.
Now we can conclude from the above discussion that contrary
t o the report attributed t o Caliph 'Umar. t h e chronology of the
revelations concerning rib2 is as follows :
( i ) the first revelation condemning riba (Sarah aLR6m)-
early years of the Prophet's Meccan life; after the
.. Romans' defeat at the hands of the Persians :
(ii) the second revelation prohibiting ribii (Sarah & ' l m r ~ n ) -
 3 A.H., after the Muslims' defeat a t Uhud ;
(iii) the third (and last) revelation threatening those who
would transgress this prohibition (Sarah al-Baqarah)--
before 5 A.H., before the exile of the last Jewish tribe of
Banti Quray?;ah.
Among the recent writers on the subject, Mawdadi appears to
be of the same view as we are, as far as the above chronology is
concerned. In the first volume of the third edition (1954) of his
Urdu treatise on Siid ("Interest") he has a chapter entitled
"b.ls- c%l 91d (QurlHnic Wisdom and Social Reform)",lS
in which he tells us in detail that riba was condemned in a Meccan
revelation and was prohibited in the verses revealed "immediately
after the Prophet's return t o Medina from U h ~ d " . ? But ~ it is
surprising that after waxing eloquent on the wisdom of the above
chronological order of these revelations, he cites, in the same
breath, the report attributed t o Caliph 'Umar in support of
his contention." But it appears that after the lapse of several years
t h e logician in (Mawlsna) Mawdadi realised the glaring contradic-
tion in the two positions and we presume that i t was this realization
that led him t o expunge the above-mentioned chapter. in its
entirety, from the latest (1961) edition of the t r e a t i ~ e . ' ~
However,
we are of the opinion, and we hope Mawdadi will also agree with
us, that t h e question of the chronological order of the Qur'anic
verses and of the historical context of their revelation (especially,
when a fundamental problem like that of ribii is involved) is not
so unimportant that a stand taken in this respect against the
current and accepted viewpoint can be quietly and unceremonious-
ly withdrawn without taking the reader into confidence.
* * *
W e have dwelt a t length on refuting the report attributed t o
Caliph 'Umar, because this as well as other such reports in the
had?&-literature prevent a correct appreciation of the nature of the
ribii prohibited by the Qur'iin. It seems that a t some stage it was
assumed that the Qur'anic account of riba was not adequate. Need
was, therefore, felt of elaborating i t through hadS&material
in order t o extend the coverage of the ribii-ban. The report under
discussion was the starting-point of a vast and ever-expanding
had?&-literature that was accumulated on the subject in the course
of time.
Like the reports on the chronological order of the Qur'anic
 FAZLUR RAHMAN 13

revelations on ribii. the had& on the nature of ribii itself, too, are
contradictory and conflicting. W e shall give a few instances of
these contradictions in the following lines :
(1) Al-Bukh~ri,Muslim. al-Nas2'i, al-Ditrimi, Ibn Majah and
Ahmad b. HanbaI have recorded hadZ& reported through various
chains of transmission whose purport is 'Ql j I?SI ("rib@
is on loans") or in the more emphatic expression of al-Buaari
" a 1d 91 b1 Y ("there is no ribii except on loans") or in the
words recorded by Muslim -k ij! d g L & 6) 51 ("there is no ribii
a
when payment is made on the pot").'^
But at the same time the Sahib of a l - B u b ~ r i ,that of Muslim
and other canonical collections of $adz+ contain the following
Tradition with slight verbal variations :
-dl plw &A AI& A1 JSYJ Jb' csJLJI &-LU ~ j 3
Jii l
'cUk +!,+ J b,.A!> *tJIj dii _I?!> - 4 b *4I3
24-s19 #I>
4

L Y l dJl A% ~I+l>l ~ !@
j 4:
f
r.+ JX.
s
3~
(Aba Sa'id al-KJgudri reported God's Messenger as saying,
"Gold is to be paid for by gold, silver by silver, wheat by
wheat, barley by barley. dates by dates, and salt by salt like
for like, payment being made 'hand to hand'. If anyone gives
more or asks for more he has dealt in ribii. The receiver and
the giver are equally guilty".)
The contradiction between the above two sets of hadi& does
not rest here. There are varied conflicting opinions of the fuqaha'
on this subject and each one of the schools has its own supporting
had?&
It appears that the 'rib2 described in the above-quoted
hadith, which is known by the technical name of ribii al-fadl ("riba
of excess") is a later innovation. Eminent Companions of the
Prophet, like Mu'swiyah, Usamah b. Zayd, Zayd b. Arqam, 'Abd
Allah b. 'Abbas and 'Abd Allzh b. 'Umar, were unaware of it.25
Some Traditions claim that the two 'Abd Alhhs mentioned above
had accepted the fiqhi repugnance of the "ribii of excess" in their
later life. However, the form in which the contrary opinion is
expressed in the ha&& as reported by al-Bubzri, viz. j % b~ '9
"'+I ("there is no ribii except on loans") or by Muslim, viz.
+ -)+
#
3g L 3 ("there is no ribii when payment is made hand
t o hand. i.e. on the spot") clearly shows that it is a protest against
its opposite and seeks to re-assert the original state of affairs
14 R1BZ AND INTEREST

produced by the Qur'Hn and that some Companions of the Prophet

at least had refused t o accept this "change" which seemed t o
gain increasing popularity among their contemporaries.
This glaring contradiction between badz'&s related to the
"riba of excess" and those related to the "riba of credit" was not
overlooked by our early experts on had:& and fiqh and they have
tried to explain it. The most famous and popular attempt t o
resolve this contradiction is that of al-&aFi, who says :
(js &+ pL.9 4_1-L9 GI& GI J*j y - L L l 33& I\j

(It is possible that UsImah found that: the people had ques-
tioned the Prophet regarding the hand-to-hand exchange with
excess of different commodities, for example, the exchange of gold
with silver, of dates with wheat and likewise other articles with
those of a different kind. The Prophet replied, according t o
Us'imah's report, that ribii concerns exchange of commodities on
credit. It is also possible that the questioner may have explained
this a t the time when he put the question and he received this
reply from the Prophet. Then Usamah reported the reply of the
Prophet only but forgot t o report the question as well. It is also
possible that he may have some doubts in regard to this matter.
because the hadf& reported by him does not contain anything
repugnant to these surmises.) The inconsistency and contradiction
between this ha.&& and the others on the same subject can,
therefore, be resolved. How far these surmises of al-S&fi'i suc-
ceed in removing the contradictions we leave to the judgment
of the reader. But one of the examples of the modern ijtih&
carried out to resolve the contradictions between these hadi& is
astonishing. Mawdndi does not discuss the "ribii of excess" in his
chapter on siid (interest) but devotes another chapter to i t
significantly titled :f i U ~ 3 9 "The adjuncts of siid (interest)".
H e writes :
 FAZLUR RAHMAN 15

2 2 9 dH J ~ &
' - - 4 1 j y l bJY b m Y f &
rU!,;l,L,dlLjscl>T~ J+ & -e ' a % ~
-t &J>$ ~a&*J$ JJ! b*vl Suu 21
i r L 9 u r'@v1-&% A&! 2J L Q a
* j
33LJ +
5 Jr k%fj3! LkfJyw & C &&
vl -rLf W r f r,*! p ? ; i ~YI JJI &
,& r f-J S J s J l l y ~'y * u? L2Jt-l 63 e '@
27-" ,&f4 3
(The initial injunction concerning siid (interest) was that siid
(interest) relating t o loans was categorically forbidden. The
ha&& narrated by Usamah b. Zayd says that the Prophet remarked
-&I d bJ ("ribii is only in transactions involving credit").
In some reports the Prophet's words are - a 1 d 3 l 4 j Y ("there is
no ribzi except in transactions involving credit".) Afterwards,
however, the Prophet deemed it necessary to put hedges around
this Divine preserve, so that people may not even approach it.
I n this category falls the Prophet's order which forbids not merely
the taking or giving of siid (interest) but also the writing of a
document involving such transaction and acting as a witness in
such transactions. In this category also fall those hadZ&s in which
the prohibition of ribii of excess has been laid down.)
The words used by Mawdadi show that the "ribii of excess"
universally covers all things in the same manner as ribii involving
credit in relation to all commodities, whether ribii is taken or
given. or a document involving ribs is written or some evidence is
given in a case pertaining to ribii.
A little further, under the title "t+ I ~ J "("What
Riba of Excess Means") he says :
S fi 4 1e u? &d 34j 0-1 J & J 1,~"
l
*tlL.3r~&.3r~JyJ-,'b~*J~&~&J2~*3~
r JL d l i j e #I j l j r!p Jfll &
e 26 $JJA - ~W.~~JJA
63 o?-. S L ~ ~ Je I
2 8 - " ~ , I+
& ~y
r,(" &ST
16 RlBA AND INTEREST

('Riba of excess' is the excess which accrues when two articles of

the same kind are exchanged from hand to hand. The Prophet has
forbidden it, because it opens the door t o acquiring more and more
[money], and breeds in man a mental attitude which ultimately ends
in living on siid (interest). Indeed Mawdadi is stressing the fact
that the "ribii of excess" refers to a general excess which accrues in
transactions involving the hand-to-hand exchange of all articles of
the same kind. One feels that the manner in which Mawdadi has ex-
tended the meaning of "riba of excess" itself smacks of intellectual
usury ! In the hadt& there is mention only of six articles with refer-
ence to which the "ribii of excess" b a s been mentioned. Mawdiidi
has extended the meaning "manifold" thus shutting out all dealings
in which something is acquired in excess of that which is disposed of.)
(2) Another example of the contradiction found in the had;&-
material concerning ribii is that which relates to the purchase and
sale of animals. This contradiction assumes significance in view of
the importance of cam-Is and horses in the economic life of
Arabia. In al-Muwatta', M ~ l i kreports from 'Ali that he sold one
of his camels on credit and obtained in exchange twenty camels."
Al-Bu&Bri has devoted a whole chapter to establishing the per-
missibility of such transactions. This chapter is entitled el!
-+ 3 1 ~ 4h9-dl3 +I ("Chapter on the sale of slaves and of
animals for animals on credit"). In this chapter a number of
Companions of the Prophet and their Successors, all of whom were

rhat -
eminent fuqaha', e.g. 'Abd Allzh b. 'Umar, 'Abd Alkh b. 'Abb~s,
Rafi' b. Qadij, Sa'id b. al-Musayyab and Ibn Sirin accord sanction
to such transactions. The sum-total of all such ha&&-reports is
o& Y (''there is nothing wrong in exchang-
ing one camel for two on credit"). The Sumn of Abii Dzwiid
and the Musnad of Abmad b. Hanbal also record a had;& from
the Prophet which runs as follows :

('Abd Alkh b. 'Amr b. al-'As reports that the Prophet of God

asked me to make arrangements for fitting out an expeditionary
force. When the supply of camels fell short, he said that he
['Abd Allah] should borrow camels against the young she-camels
which would be given t o the fiscus in alms. Therefore, he effected
 FAZLUR RAHMAN 17

a transaction a t the rate of one camel for every two to be received

in alms by the ficus [at the time of the collection of zakiih].) This
had;& has been recorded also in the Sunan of al-Bayhaqi and i s
supported by a strong chain of authorities
In contrast to the opinions held by the Traditionists of t h e
earlier period, like Mdik and others. on this subject. their suc-
cessors exhibit a gradual strictness. The Jiimi' of al-Tirmi&i
contains the following badttb :
&I~I,.+II +., ~ & ~ l & dJpJ l JG J G 4 j & ,js
32-44 i4
A+ & Y, i
;; +Y ;*I,
(Jiibir b. 'Abd Allah reports that the Prophet said to him that
in a credit-transaction it is not permissible to take two animals for
one. However, if it is a hand-to-hand transaction, such a thing
would not matter.)
The compilers of the Sunan-works, later on collected hadit&

--
which totally prohibited the exchange of animals on credit,
whether or not there was an excess. For example. a tradition o n
the subject says :
3 1 ~ l ~ ~ ~ ~ , J - ~ ~ & A l +
& ,p, ~ I 3 1
33' dl,&
(It is narrated from Samrah that the Prophet of God pro-
hibited the exchange of one animal for another on credit.) T h e
same had;& also occurs in the Musnad of Ahmad b. Hanbal. But
the significant point is that the hadi& is found not in the main text
of the Musnad but in the supplement, added t o it by a son of
Ahmad b. Hanbal. Moreover, it is one of those had;& which
have not been narrated by him directly from his father.34 In t h e
Sunan collections of the later period and other collections made
by later writers, we find bad;& contradicting this hadi&. This is
not surprising since the former are doubtless prior in time, i.e. go
back to an earlier period. It is evident that in the bad;&-material
on this particular subject, too, there is a marked tendency of
making the & a d ah progressively more rigid.
(3) One of the forms in which this contradiction appears in a.
most palpable manner is connected with the question of the leasing
of land. The way in which landlordism and feudalism have sapped
the strength of Muslim society requires that such badit& should be
carefully studied. In the $ah$ of Muslim and in other $ibab-works,
18 RIB^ AND INTEREST
the renting of land on the basis of a proportionate share of the
produce or on cash payment has been explicitly prohibited. In all
these Jihiih-works, the terms used for such prohibition are
&"Yl S I X,y &. rZ~l;rll 3 4 r-&WI 3 & and whole chapters
containing ha&& have been devoted t o these matters. These
hadit& have been narrated by six different Companions of the
Prophet, viz. Riifi' b. Qadij, Jsbir b. 'Abd Allah, Aba Hurayrah,
Zayd b. DZbit, Abii Sa'id al-Qudri and D a b i t b. al-Qahhsk and,
indeed, have been narrated by each one of these Companions not
through any one chain of isniid, but many chains. Among the 4udfths
which concern human dealings, there are very few which reach
such a degree of "currency" (o&) because of their being so well
supported. Whether this type of badi& actually does go back to
the Prophet or not, i t undoubtedly represents the original state of
affairs because in Mecca there was neither land nor landlordism
while in Medina, because of small holdings, everybody tilled his
own land and thus there was hardly any landlordism. With some
verbal changes or changes of expression, the gist of all these
hadigs is contained in the h a d i a of the Sahib of Muslim which
says :
&I J r;ilCcj. +-2 & Al& &I Jpj Jb Jlj ~k

(It is reported by J ~ b i that

r the Prophet said, whoever is in
possession of land, must cultivate it himself but if he cannot do so.
and is unable to cultivate the whole of it, then he should bestow
it [or part of it] on his brother Muslim as a free gift or lend it t o
him but he should not seek wages [profit from it in any form].)
As far as the early collectors of ha&& are concerned, the
hudihs contained in their collections simply forbid the leasing of
land or levying a tax thereon, but it has not been termed 'ribii'.
T h e important thing with reference t o the subject under discussion,
however, is that later on in the Sunan of Aba DBwiid there is a
&di& narrated by JJgbir b. 'Abd Allah which puts this cruel
agricultural system in the category of ribn. The hudi& says :
I+L.>+Al&AIJFj L;L(LU. JWAl+adkp
36- J9j 2 A 1 3 d i u i A M l j & ,J JA
( J ~ b i rreports that the Prophet said : 'The person who does
 FAZLUR RAHMAN 19

not desist from leasing his land [on condition that he will receive
a certain agreed proportion of its produce] should be ready to face
a war from God and His Prophet.')
It is worth noting that this hadi& condemns landlordism with
exactly the same threat which was used by the Qur'sn against ribii.
It seems that the Muslims resorted to ijlihiid when, after t h e
conquest of Persia, they had to deal with the firmly-rooted feudal.
system of that country. A justification was sought for landlordism
in the example of the Prophet at the time of the conquest of
n a y b a r , because the Prophet had allowed the conquered land i n
Uaybar to remain in possession of the Jews on condition that
they would retain half the produce of the land and give the other
half to Muslims. As a result, we find that there is a hadith in all
the six canonical books of hadi& (Sihiih Sittah) that 'Abd Allah
b. 'Umar continued leasing his land for a long time, although t h e
hadi& says, at the same time. that he gave up the habit in
later life.
Abu Hanifah appears t o have explained the a a y b a r incident
as being a case of &ariij. The Prophet, he argues. levied Bariij on
the Jews as an act of kindness and as a mark of his peaceful
intentions. Otherwise, he had got possession of Qaybar as t h e
result of a conquest and as such the whole territory had fallen a
booty to the Muslims. It was quite permissible for him, therefore,
to have taken possession of the entire land. But he did not d o
so. Instead, he allowed the lands of a a y b a r to remain in t h e
possession of the Jews on condition that they made over half of the
produce of land to the mu slim^.^' A prominent Hanafi expert
on h a d i g , 'Ayni, has remarked in support of Aba Hanifah, "No
tradition exists in the corpus of hadit& to show that the Prophet
levied the jizyah on the Jews of U a y b a r during his life-time. Nor
is Abii Bakr or 'Umar reported to have done this. Finally, 'Umar
exiled the Jews from Baybar. If the Prophet had not already
made the settlement which he had made with the Jews of a a y b a r ,
it is certain that the jizyah would have been levied on them, after
the verse regarding jizyah had been re~ealed".~'It must be said here
by way of explanation that this argument of 'Ayni in reality
contradicts the argument put forward by Abii Hanifah, because
if the lands of &haybar fell within the category of booty, there was
no question of jizyah being levied on them.
As mentioned above, there is a sabih badi& in the Sunan of
20 Ria A N D INTEREST
Abo Diiwod narrated by Jxbir b. 'Abd Allah which says that any
person who leases land on the basis of a division of the produce is
liable t o get the same extreme punishment that is prescribed for a
person who takes r i b . Ignoring this hadZ& and other supporting
~ a b i hha&&, a number of which verge on tawiitur. i.e. near
unanimity, Mawdtidi has sought to find reasons for the permissibility
of riba in the form of landlordism in his monograph on landed
property entitled Mas'alah-i Milkiyyat-i Zam-in." H e is suppor-
ted by Mirzz Ba$r al-Din Mahmad [Head of the Ahmadiyah] who
upholds similar views on the question of landlordism in his Urdu
tract IslZim awr Milkiyyati Zamin ("Islam and the Ownership of
bnd").
The contradiction found in the badiths in respect of ribii is
difficult to resolve. On the basis of isniid alone, there is not much
scope either for the rejection or acceptance of these Traditions,
because, as is clear from the above discussion. the Sihiih works
contain a good number of hadigs on each aspect of these topica.
Everyone of these hadit& is either $ahih, i.e. supported by a strong
chain of authorities or is supported by other hadit& of the level of
jahZh hadi&. The surmises made on the basis of q i y a (analogy)
are not so important in our opinion as the historical order of these
fradi@s, because the historical order is something which is based on
certainty. and is not a mere matter of probability. If these bad;&
are viewed in this way. it becomes apparent that there is a clear
process of development involved therein. All three cases mentioned
illustrate a progressive rigidity of opinion. as we pass from the
early Traditionists t o those of the middle period and then from the
latter t o the later Traditionists. As we go further, we shaIl find the
same process of development taking place on the question of the
definition of ribZi. This process of development is at the bottom of
the contradictions found in the b&&-material.
Besides the above-mentioned contradictions, most of these
4adiths are full of other complexities. which we find it almost
impossible to resolve. For example :
(1) As we have mentioned above, if there is hand-to-hand
exchange of articles like gold, silver, wheat, dates or salt in excess
o r in deficiency, that would become riba, in accordance with the
most widely current Traditions. This is what has been called
"ribii al-fad1 (ribn of excess)", according to which if a bushel of
wheat of better quality is exchanged for a bushel and a quarter of
 FAZLUR RAHMAN 21

an inferior variety, the transaction would fall in the category of

ribii : similarly, rock salt if exchanged for sea-water salt. even from
hand t o hand, would become riba. if any excess in weight is
involved. Now the question is whether the Qur'gnic declaration
that if people do not give up ribii, they should be prepared for "a
war from God and His Prophet" refers to such transactions and
whether it is with reference to these dealings that such Badi&s have
been narrated in which it is said that the taking of ribii is as
revolting as incest.
(2) According to the Muwatta' of Mdik and the Sahib of
al-Bufiiri. excess is permissible in a transaction involving cattle,
even on credit. and such excess cannot be characterised as ribti.
T h e question, therefore, arises as t o why such excess in respect of
other forms of wealth should be considered riba.
(3) The SahlB of Muslim and other Sahib-works contain
(tad& showing that the credit transaction, not only of cattle but
even of slaves and coins of copper. is permissible, even when such
transaction involves excess. References t o most of these ha&&
may be seen in the relevant chapters of hadf&-collections cited in
this paper. I t was in view of such hadit& that al-Bayhaqi devotes
a whole chapter in his al-Sunan al-Kubrii entitled -
4o-k&Jl3 -dl3 UJ$.U, JJbt 3 & L j bY
(There is no ribs beyond the articles which can be used as food or
drink and articles of gold and silver.) Therefore. the question of
ribii does not arise with regard to those commodities which are the
backbone of Pakistan's economy, i.e. jute and cotton! However, it is
possible that our fuqahii' may reply that jute is "the golden fibre"
and cotton is "the silver crop"! Therefore, they also fall within
the category of gold and silver. The same principle will apply to
the oil found in Arabia, Persia and elsewhere because oil is called
46
liquid gold". But what judgment will our Iegists pass on hides and
skins which are an important source of the wealth of our country ?
In view of the sharp contradictions and insoluble complexities
found in the large number of Traditions concerning riba it would
be a courageous act t o attempt an inclusive and exclusive definition
of riba, i.e. a definition which would cover all cases of ribii and
exclude transactions which do not fall within this category. But
the lexicographers, a t least-, cannot do without some definition of
the term. Therefore, we find that the third-century lexicographer
and gmnmarian, al-Zajjiij ( d. 311 A. H. ) has defined the term
 (Ribii is of two kinds, one of which is forbidden. This is the
riba which a person earns by taking from the debtor more than the
principal sum which he has given him on credit or any debt from
which any profit might be obtained. The other riba, which is
permissible, is a gift in exchange of which the giver demands a
more valuable gift or in exchange of which he expects t o receive a
bigger gift.) It would have been surprising if a definition of this
kind had not found its way in the collections of hadit& T h e
manner in which it secured its place among the hadith-works is
worthy of consideration. There is no trace of any such h a d t h
during the second, third or even the fourth century. Neither the
Jihiih nor the Sunan nor even the Musnad of Ahmad b. Hanbal,
collected by his son and his disciple, which is the most exhaustive of
early hadZ& collections. contains any trace of such badi&. Suddenly.
in the fifth century A.H., al-Bayhaqi (d. 458 A. H.) in his Sunan has
a chapter headed :
42- 6, >&i
-&;4>Q
(Every loan from which some profit accrues is riba.) In this
chapter there occurs the following hadZ& :
JS&djl+j+j~Al&&I~LP++~'kJld~
43d9* -
431 6 . 3 ,y 4FJ*"A 2* j
( A Companion of the Prophet, Fudalah b. Ubayd. said that
every loan from which some profit accrues t o the creditor is one of
the forms of ribii.) Two facts should be noted in this connection.
First till now, i.e., the fifth century, the bad?& in question is
mawqiif, i.e. it does not go back t o the Prophet, and the chain of
transmission comes t o an end with one of the Companions.
Secondly, it has still not reached the degree of comprehensiveness
required of a definition. The words used are very nearly the same
which found their way in the Lisiin al-'Arab 150 years hence, i.e.,
;i*k; 29
I
~6(every loan from which a profit - accrues) but the
mode of expression still lacks precision, because al-Bayhaqi says
I
"421 6 4 - 3 & (it is one of the forms of ribii)". Once this
'J i r ~
 FAZLUR RAHMAN 23

lack of precision had been removed in the centuries that followed.

we find this hadifi in the ninth-tenth century of the Hijrah in the
work of al-Suytlti (d. 911 A. H.) entitled al-diimi' at-Sa&ir, where
it takes the form-

(Every loan from which a profit accrues is ribii.) But this is not
all. During this intervening period, the hadith had gone through a
process of evolution and was projected back t o the Prophet from
whom 'Ali is said t o have heard and narrated it. Thus, now i t
becomes the injunction of the Prophet. Al-Suyati refers t o an
obscure Musnud said t o have been compiled by one Harith b.
Muhammad b. Abi Salmah, which is not known even t o
I
al-Zirikli, the author of a2-A'liim. H e says about Hiirith, "z- 4
454~ C) (there is a Musnud by G r i m b. Muhammad, which he did
not arrange"). However, al-Suyati takes care t o remark that the
hadig in question is da'if (weak). A t the end of the same
century, i.e. tenth century of the Hijrah, the Indian Muhaddi&
(Traditionist) 'Ali al-Muttaqi of Burhznpiir (d. 975 A. H.) quoted
this very hadig in Kanz ~l-~Umrna2 in the chapter entitled "The
Chapter Concerning the Adjuncts of Credit" in exactly the same
words and supported by the same authority. However, he omits t o
mention the fact that the badi& belongs t o the category of da'if
tradition^.^' This is a further step in the evolution of this hadi&
within these few years the hadith ceased t o be 'weak'. The
Egyptian, s a y & 'Ali b. Ahmad al-'Azizi (d. 1070 A.H.), in his
commentary al-Sirfij a2-Munir on al-Suyiiti's a2Jiimi' al-Sag&,
characterises this had:& as falling within the category of 'basan
li-g&ayrihi', i.e. i t is hasan (good) on the basis of other supporting
e~idence.~'Now in the present century Mufti Muhammad a a f i ' .
a Pakistani scholar, in his Urdu treatise entitled 'The Problem of
Interest', to which we have referred several times in this paper, has
given his judgment after quoting Fayd al-Qadir and a2-Siriij al-
Munir in respect of this hadi& that it is salih Zi 'L'amal (valid
basis for legal decision), and therefore, it can be cited t o buttress
a n argument"." In the appendix t o his treatise, Mufti a a f i ' has
laid renewed stress on this hadith, and has based all his premises
and conclusions thereonadg
Mufti Muhammad S&afiL is, in fact, so insistent on this
supposed definition of ribn that h e wants t o remove any suspicions
about this hadz'& falling within the category of 'da'if (weak)'
 24 RIB^ AND INTEREST
traditions (indeed of its being without any foundation a t all). H e
6'
says, When experts on lexicography and prominent commentators
(of the Qur'zn) are all agreed on this definition, there remains no
need of any further had?& or tradition" (p. 79). In the beginning
of his treatise he justifies this stand in the following words :
LL
In short, this sense of rib& viz. that it consists in acquiring some
profit from a loan given t o a person, was well known from the
beginning and all Arabs knew it very well. Even if this bad@ did
not exist, Arabic lexicons would have been quite sufficient t o make
the meaning clear. References in connection with this will be
given presentlyw (p. 10). A little further, on page 12. t h e author
gives the reference of the Arabic lexicon which he had promised
earlier. This reference is t o the above-mentioned definition of
ribii made by al-Zajjsj and quoted by Lisisn aLLArab. It is obvious,
however, that by the mere fact that a particular definition bas been
entered into a lexicon (Kitiib al-Ludah) however authoritative the
latter may be. it does not thereby become an absolute definition in
language. I t is also well known that the dictionary meaning of
ribii is : "excess, growth, and elevation," as has been accepted by
Mufti Muhammad Shafi' himself. In the introductory section of
this paper we have tried t o explain this very meaning of ribii with
illustrations drawn from the Qur'snic verses.
The excerpts given by the author in support of h ~ definition
s of
ribii make the above fact very clear and they also prove that
eminent lexicographers and prominent commentators of the Qur'Zn
quoted by him. if they do agree on anything a t all, it is that they
shall all differ and that each one of them shall give a definition
of his own.
Ibn al-Athir, in his dictionary of badz'& entitled Kitiib al-
Nihiiyah f?-@wrz'b al-h-adz& wa '1-Athar says :
JUI &I Jr ;>lijl -
jJ ;>4;11 @ &?/I 13Jl
5"- && &#

(The original meaning of riba is excess and in the terminology

of the SarS'ah, it means increase in the principal without any
contract of.sale having taken place.)
Ibn aL'Arabi, in his commentary of the Qur'zn entitled Abkiim
al-Qur'iirr, which deals with the legal injunctions of the Qur'sn,
gives the following definition of ribii :
j I j JJJ J O">bjll - d l 431
51-29
Uk
 FAZLUR RAHMAN 25

(The lexical meaning of ribs is excess. In the Qur'iinic verse,

it refers to that excess which does not carry with it a corresponding
consideration.)
In the famous legal commentary AQknm al-Qur'an of AbrZ
Bakr al-Jas@ the fact has been emphasized that :

H
3 L& $ j*, ... ; ~ b j J I pUl 431 Jsl
5 4 i;UI j l,J L+p ,+Y I ;Sj I$
(Literally. riba means excess. but in the &arZ'ah this word
has been used in a sense other than the one for which it (the word)
was originally made.)
A little further, al-Jass~sdefines the term ribs as follows :
53- U H I JS JL G ~ b j9 &YI @ b > a \2 31 9
(Riba is the loan given for a specified period on condition t h a t
[on the expiry of the period]. the borrower will repay it with some
excess.)
Mawdodi has paraphrased this definition of ribs as follows :
Lp 2 3 ula 4 &+5+&
3;j 6
& L m ~ ~ + ~ l b + ~ d & Jl LI ~~ ~ ~. ~~ ~ J~ U I

(Therefore, siid [interest] is that excess money which is ob-

tained on determinate conditions and a t a fixed rate for the principal
loaned out in consideration of the period for which the money has
been lent.)
In this connection, al- J a s s ~ ssays :
b+ppYI &+3W @LJI J1 U I &. 'LYI
5

(Words which have passed into the terminology of the a a r i ' a k .

from the language [of the Arabs] so that they have lost the mean-
ing for which they had been originally coined. e.g. ~ a l i i t (prayer),
Sawm [fasting], zakah [welfare-tax], require re-statement and pre-
cise definition. It is not proper t o argue in general from that word
or term [in its original linguistic sense] in order t o establish the
illegality of a particular business dealing, except when i t is
26 RIBA AND INTEREST
established that that particular deal falls within the definition of
the SJarf'ah term.) It is clear that the manner in which al-Jasgg
solves this problem is very different from that of Mufti
Muhammad s a f i ' according to whom-
b$, up +P rlf jd &- e,& r+ IC 1~
i*;z,&J +p &J+yj,bIj'# C? 'W
56'b- jlf2 L
(The meaning of ribii was already well known in Arabia and even if
this ha&& were not there Arabic language itself was sufficient t o
make the meaning of ribii clear.) Mawdodi goes a step further and
says .-
o I, & r l i IC jJ& 5 yj dL iZ;l 19JI&iX''
e+- jJ 5 #I * &? bi9 2 #I &-,&J +
L Z I A T ~ ~ ~ $ W I ~ & 42 I, 3 5U?;
"- e
' ' 9 J f ~ l - A L( f l r f l
(Because 'al-ribii' was a particular type of excess which was
well known, therefore. the Qur'zn did not care to explain it and it
was deemed quite sufficient to say that God had declared ribii to
be unlawful and that people should give it up.) Al-Jass~sis a jurist
and a commentator of the fourth century A. H. (he died in 370
A. H.) ; according to him, one needs the help of Qur'iin and the
Ha&& to understand the definition of ribii, but these jurists of the
fourteenth century of the Hijrah seem to have dispensed with that
assistance. Shall we call it progress ?
W e do not agree with al-Ja@s that the term 'ribii' is like ?awm,
~ a l i iand
t zakah. etc. and that its meaning is fixed by the SarZ'ah.
In the first part of this study. we have made it clear that a t the
time when the Qur'an was revealed there was a particular type of
tyrannical business prevalent in Arabia which was called 'ribii'. So
tibii is a historical phenomenon which is evaluated by the gharf'ah.
But let us. for the sake of argument, accept the advice given
by al-Jas+~ and find out whether the above definitions are based
o n some evidence from thz Qur'an and @adz& and whether they are
jiimi' and miini', i.e. inclusive of all that comes within their scope
and exclusive of anything which is not covered by them.
From the Qurs'nic viewpoint. none of the above definitions
seems t o be correct, because as we have noted in the first section
 FAZLUR RAHMAN 27

of this study, (i) in the Qur'sn's own clear words ((tJ1 1s t-Y
GLiu k l ) ; (ii) the historical arrangement of the revelations
on the subject and Gii) in the light of the historical traditions
handed down by the commentators who were in direct contact
with the Prophet's Companions, tiba consists in doubling and re-
doubling the original sum loaned out.
However, from the view-point of hadTt& some important con-
clusions can be drawn, in spite of the contradictions found in them
and the complexities involved therein. These conclusions are a s
follows :
(1) According to the Tradition attributed t o the Caliph 'Umar,
the correctness of which we have already discussed in this section,
no strict and obvious definition of tibZ is possible at all. I t i s
surprising that our present religious scholars stress not merely t h e
correctness but the importance of this Tradition from 'Umar and
in the same breath express the opinion that the definition of rrba
was commonly known in those days so that there could be n o
ambiguity left in the minds of men. As against our present
scholars, however, early religious scholars seem t o be aware of t h e
difficulties involved. Thus, al- Ja@s writes :
&lj&&@4 ;)gd &Y l+pUjb.Li1 4 1 6 1

-1 4'Y t;ul s L ~;)g A-iY +

Ulr & U UJl

Lfip~(-.&&IJi)t(Jl~~~I ~LUp?2J'~j*&~-&.d&
58, c j U l 3 1 b'+l - ' I S L Y I j L iJj;! jb
(Rib5 has now become a term of the sari'iih. If it had re-
tained its original literal meaning, 'Umar would have remained in
no doubt about its actual import, because Arabic was his mother-
tongue and he well knew its literal sense. An argument in favour
of this position is that the people of Arabia did not consider t h e
deferred exchange gold for gold and silver for silver as ribii, while
according t o the SJaSah, this too is riba. Ribii thus becomes.
like one of those words which are mujmal [concise] and require
explanation and elucidation.)
(2) The above definitions are not inclusive (jiimi') because none
of these definitions can apply t o the ribii al-fad1 (riba of excess)
(see the contradictions in the Traditions on this subject discussed
above). I t is surprising that on the one hand the definitions given
28 RIBAAND INTEREST

by Mufti Muhammad Sh_afiLand Abu'l A'18 Mawdiidi lay so much

8 -
stress on the dictum that "h4 (every loan from
5
which a profit accrues is ribii)". (His statements have been quoted
above.) On the other, Mawdudi says-
'A &- $ & ' 5 9 '5-b ( l q &v & +[ uf-2

(The jurists of Islam too from the first [sic] century onwards
are agreed on the principle that every loan from which any profit
accrues is ribti.) But these very people accord ribii al-fadl (rib~i
of excess) the full status of ribii. even though it involves no loan. 'O
(3) In the same way the above definitions are not ex~lusive
(miini'), because according to the following Traditions of the
Sah2h of Muslim, any excess at the time of the repayment of a
loan is not merely not ribii but in the words of the hadig constitutes
husn al-qadii, i.e. "a good way of fulfilling a contract". Muslim has
a whole chapter entitled
+I &&-2 d A r& #me
& h l +&

(Chapter relating to him who borrowed something, then he re-

paid it with something better and the best of you is he who repays
another with something better.) In this chapter there is a hadith
.which says :

(Abo R ~ f i ' [a client of the Prophet] said : "the Prophet

borrowed a young camel from some person. and when some camels
from the camels of the sadaqah came to him. he ordered me to
pay back the man his young camel. When I told him that I could
find only an "excellent" camel in its seventh year. he said. 'Give
i t to him, for the best person is he who discharges his debt
with something better'.)
This same Tradition has been traced back to Abu R ~ f i ' with
slight verbal changes through another chain of transmission and to
 FAZLUR RAHMAN 29

Abii Hurayrah through three different chains."

The above-quoted Tradition is found also in the Muwatta' of
Mdik. Here it has been narrated on the authority of Yahyi who
has narrated it from Mdik through Zayd b. Aslam who related i t
from 'Atb' b. Yasar through Aba Rbfi'. The same Tradition.
narrated on the authority of Abii Hurayrah, is also found in the
SahTh of a l - B u k h ~ r i . ~The
~ above Traditions which fall within
the category of "Ma&htir (famous)" seem t o have raised in the
minds of some people the doubt that the conversion of riba into
the virtue of "the goodness in the repayment of loan" relates only
t o the purchase and sale of cattle. This idea is quite marked in
most of the chapter headings of the Sibah works cited in our
notes.64 If this surmise is correct, two points arise which require
consideration. First, if a t the time of the repayment of a loan,
the excess paid over and above the principal sum of money is not
ribis in the case of cattle, what is t o happen t o the universality of
the dictum so very much insisted upon by our doctors that "every
loan from which a profit accrues is ribii "? Secondly, a matter which
constitutes the virtue of "goodness in the repayment of loans",
in the case of cattle. becomes, when applied to forms of wealth
other than cattle. an evil of such enormity that it is characterised
as an act of war against God and His Prophet. How is this
intelligible ?
A had@ quoted in the Sunan of Aba Dawiid and the Musnad
of Ahmad b. Hanbal shows that such an invidious and unjust
distinction between cattle and other forms of wealth cannot be
attributed to the Prophet. The words of the ha&& in the Sunan
of Abu Dawiid are as follows :
& 3 ;)tC J+ At-+ 3 *Is. GI- JW 9
65- &ljg j
- $J +a9 + d!&
(Muhbrib reported that he heard Jiibir b. 'Abd Allah saying
that the Prophet owed him [Jlbir] some money and at the time
of the repayment of the loan the Prophet added [some money1 in
excess of the principal borrowed.)
Besides. as we have shown above in detail, according t o some
hadS&s in the Muwatta' of Mblik and the Sa&h of al-Bukhbri,
there is no ribii at all in the deferred exchange of cattle. A hadT&
t o the same effect is also found in thz Sunan of Abii Dawad as well
as in the Musnad of Ahmad b. Hanbal, which we have already
30 RIBX AND INTEREST

quoted. The matter does not remain confined t o cattle but passing
on t o slaves and copper coins, it reaches through the Sunan of
al-Bayhaqi t o all those things which are not gold and silver and
d o not fall within the category of articles that can be eaten o r
drunk. In the face of all this, not only does the definition that
6L
All loan from which a profit accrues is ribii" break down but
even other definitions become pointless.
(4) Ibn aL'Arabi's definition of riba in his Ahkiim aLQur'iin,
viz. that it is an excess which carries with it no compensation or
s.
consideration ("49&1ji? PJ Wj &") is very interesting, because
it sounds very much like the Communist theory of "unearned
income". But if this definition is accepted, there is no room for
the permissibility of mudisrabah (sleeping partnership). Mufti
Muhammad S a f i ' quotes this definition in support of his argument
but evidently overlooks its dangerous implications. Some people
say that the risk involved in mudarabah is the consideration for the
excess earned in the form of profits. But in the "big business"
world of today, the danger of bankruptcy involved in banking is
almost as much or as little as the risk to which the partners in a
modern "cartel" are exposed. Similarly the loans advanced by the
banks t o businessmen may never be repaid. This is a risk which
the banks have t o face perpetually.
In short, no attempt t o define ribii in the light of hadS& has
been so far successful. The question. then. is whether all the
Traditions relating t o fib& having been found unauthentic, should
be rejected in toto. W e would reply most emphatically in the
negative. I t is true that the evolutionary process through which
these hadies have passed and of which we have given a brief
account above has shown them not t o be authentic. But it would
be a grave folly t o ignore their moral import since they are sincere
and performed attempts a t interpreting and elaborating the
Sunnah of the Prophet and the Qur'snic injunctions. The fact i s
that the spirit underlying these efforts was the Qur'gnic spirit in
respect of economic life and economic system that it wanted to
promote. Therefore, we feel convinced that in order t o under-
stand ribii as meant by the ha&&, it is first necessary t o understand
what the Qur'sn meant by ribii.
* * *
W e have already mentioned in the first section of this paper
the kind of riba which the Qur'an prohibited. But this is the negative
 FAZLUR RAHMAN 31

aspect of the problem. To understand the positive aspect we

should take into account the important fact that, according to the
Qur'zn, the opposite of ribii is not bay' (trade) but sadaqah
(charity). The prevailing confusion about the problem, we submit,
was due t o ribii and bay' being considered opposed t o each other.
The result was that juristic hair-splitting was substituted for the
moral importance attaching to the prohibition of ribii. In the
Qur'sn, the very first revelation condemning rlbii speaks of "what
you give by way of zakiih" in juxtaposition with and contrast t o
41
whatever you invest b'y way of ribii". In the same way, the last
revelation on this topic speaks of Alkh as "destroying ribii", but
this is immediately followed by the remark "but H e makes alms
(sadaqiit) prosper". How these verses of Siirah al-Baqarah con-
cerning ribii get a place immediately after the Qur'Hn had spoken
a t length in the same Surah on the organisation of sadaqiit, the
manner of their disposal, the various injunctions concerning them
and finally of their important place in the social welfare structure.
W e have repeatedly emphasized that from (i) the clear words
of the Qur'in "Do not consume ribis doubling and redoubling",
(ii) the chronological order of the revelation of the Qur'gnic in-
junctions against ribii, and (iii) the explanatory historical (as
distinct from legal) Traditions received from the early commen-
tators of the Q u r ' h , it is evident that the riba of pre-Islamic days
which had been prohibited by the Qur'sn was that which consisted
i n doubling and redoubling the original amount (tad'if f i '1-gar@
and this fact of redoubling constitutes the 'illat al-hukm, i.e. "the
reason" underlying its prohibition. Keeping this in view we would
do well t o note that in the following verses of the Qur'gn the
fadaqah (charity) has been brought in direct contrast with ribii :

(YVO : W )
"Who is it that will offer to Allah a handsome loan, so that
H e multiplies it to him manifold" (11 : 245).
6
*I JJ d & - ~ - & j O j $ & i J l IJ +
(1 1 :+4
f-J-
"Who is he that will offer t o Allah a good loan, so that H e
will double it for him, and such a one will have a generous
reward :" (LVII : 11).
32 R~BA
AND INTEREST

+>+ 9 +& -Lbe-dl l+$hl

)
( I L :ij~L""

"If you offer t o A l l ~ ha goodly loan He will double it for you

and forgive you." (LXIV: 17)
All these verses seem to be the elaboration of the idea con-
tained in the second part of the first verse condemning ribii, which
occurs in the Sorah al-Riim and reads as follows :
h + d l e U 9 I - i A1 +> h3&> i l g j a +I' L 3
( r 9 :y931)
"And what you give by way of zakah seeking the pleasure of
God, those-they shall receive recompense manifold." (XXX :39)
According to the Qur'sn, then, the opposite of riba is gadaqah.
But what is gadaqah ? This question requires considerable elucida-
tion for which this is not the proper place. W e cannot, however,
but stress the fact that gadaqah does not mean the begging and
giving alms a t the entire sweet will of an individual. Besides.
applying the principle that things are known by their opposites, i t
is necessary to locate the opposition between ribii and gadaqah,
however brief our remarks in this connection may be, because a s
an Arabic maxim says &AS Y 4 4 4 Y L. . (That which cannot
be preserved fully must not be allowed t o be given up completely
on that account.)
There is a tension between ribii and sadaqah of which bay'
(trade) is a quasi-middle term. From this tension, it is abundantly
clear that the Qur'sn calls for co-operation and mutual considera-
tion in place of pure competition and profiteering. This co-operation
and mutual consideration constitute the essential spirit of ~ a d a q a h
just as competitionism and profiteering lead t o ribti as their extreme
form. It should be noted, however, that juristically the term
'sadaqah' does not mean co-operation and mutual consideration.
nor does 'ribii' juristically mean competition and profiteering. It is
because these two senses of the terms have been intermixed that
the contradiction remains unresolved. The truth of the matter, in
our opinion, is that the desire t o put into a legalistic mould the
moral teachings of the Qur'gn and the living Sunnah of the times
has brought into being the evolutionary process in the hadith-
material of which we have given in the foregoing some account.
The following remarks of Ibn Qayyim which we quote here in
detail point to some such conclusion :
 FAZLUR RAHMAN

J plh; 9 (sA!431 6s +-& elJl Jr;r p 4,;JIj

J

66 - p+gb L I Jl x 4 J b ,/I
U'

(There are two kinds of riba : (1) manifest or real [jaZiy] and
(2) concealed or implied [&afiy]. The manifest has been for-
bidden because of the grievous wrongs it inflicts on society. The
concealed riba, however, has been forbidden'because it may lead t o
the manifest ribii. Therefore, the first category of riba has been
directly [ i ~ ] while the second kind of ribii has been
prohibited
indirectly [=~~LYJ] prohibited. The manifest-ribii is, in reality, the
34 lUBA AND INTEREST

rib5 in which credit is involved. In pre-Islamic times it consisted

in the payment of a debt being delayed which led t o an increase in
the amount loaned out. The result was that the original sum lent
[the principal] was increased in proportion t o the delay that took
place in the payment of the debt. This went on until a sum of one
hundred increased t o thousands. In most cases the debtor was a
destitute and needy person who had no alternative but t o delay the
payment of the debt and the creditor agreed t o postpone his
demand [for the clearance of the debt], and chose t o wait so that
he might obtain more profit on the principal invested by him.
The debtor, on the other hand, was forced t o pay the increased
amount, so that he might ward off the pressing demands of the
creditor and the dangers and hardships of the prison-house. Thus,
time passed and the monetary loss of the debtor went on increasing,
while his troubles multiplied and his debt accumulated, until all his
possessions and belongings were lost t o the creditor. In this way,
the debt of the poor man increased without his earning any profit;
on the other hand. the wealth of the creditor went on multiplying
without this being shared by his brother [the debtor]. The credi-
tor in this manner acquired by unlawful means the wealth of his
brother [debtor] and his brother suffered loss upon loss. There-
fore, God in His Mercy and Wisdom and out of unbounded kind-
ness t o His creatures prohibited rib6 and condemned its consumer,
its payer, he who drafted documents concerning it and those who
acted as witnesses t o dealing in such transactions, while those who
were not ready t o give up ribii were asked t o be prepared for a war
from God and His Prophet. Such a threat has not been uttered in
respect of any other major sin [al-kabTrah] which fact leads t o the
conclusion that i t is the most heinous among the major sins [akbar
al-kabii'ir]. When Ahmad b. Hanbal was asked as t o the riba
about which there was no ambiguity or doubt, he replied, "The mani-
fest ribii about which there could be no ambiguity is this : that
someone is indebted to another and the creditor asks the debtor
whether he is ready t o pay the debt or would alternatively agree
t o an increase in the principal loaned out t o him. If the debtor is
not able t o pay, then the creditor increases his principal as well as
the term of repayment." God has mentioned rrba as the opposite
of gadaqah. Therefore. a person who takes rib& will be just the
opposite of one who gives a gadaqah. God says, 'He destroys ritii.
but makes alms prosper'. And H e further says. 'Whatever you
 FAZLUR RAHMAN 36

invest by way of riba, so that it may increase upon people's wealth,

increases not with God; but whatever you give by way of zakiih
seeking the pleasure of God, t h o s e t h e y receive their recompense
manifold'. God has also said, '0you who believe, do not consume
ribii with continued redoubling and protect yourselves from God
perchance you may be blissful. And guard yourself against the
Fire which has been prepared for the disbelievers' (111 : 129-36).
After this the Qur'iin speaks of 'Paradise which has been made for
those who spend their wealth in ease as well as in adversity' and
thus, they are the very opposite of those who take ribd. In short,
God forbade rzbii on the one hand, because it is an injustice done
t o the people and, on the other, H e commanded the spending of
wealth as fadaqah, which is of benefit t o the people.)
Muhammad Rashid Rida's corninent on the opinion expressed
by Ibn Qayyim is also worth quoting. H e says :
JGJ &I L!J1_1 @I I+-, L W I & &I LiJ1 I.$

(This riba which 'Alliimah Ibn Qaggim has termed manifest-

rtbii and about which I r n ~ mAhmad [b. Hanbal] sags that it is the
kind of tibii of which the unlawfulness has been proved beyond
any shadow of doubt by the clear text [na?;] of the Qur'8n. is the
ribii which relates to credit transactions such that if a poor man
could not repay his debt even after the passage of a long time or
of many years, the amount he owed was increased manifold. This
riba ruined homes, emptied the human heart of fellow-feeling and
created a gulf of enmity and hatred between the rich and the poor.
When the Prophet limited rzba to the ribs which is involved in
36 RIBX AND INTEREST

credit transactions. he really made clear the rib6 meant by the

Divine injunction and on whose non-observance God threatened
t h e Muslims with a dire punishment. which is even severer than
the threatened punishment for disbelief. Would any person gifted
with reason and intelligence maintain that this prohibition of ribii
is harmful t o human beings and prevents them from adding t o their
wealth ? If capital cannot accumulate without ruining the homes
of the poor and satiating the avarice of the greedy. then not one
man would view with approval this kind of addition t o wealth.)
In short, the ribii of the Qur'sn which has been prohibited in
clear words is the ribii which Ibn Qayyim calls "the manifest ribii"
and which is characterised by the continued redoubling of the
original debt. Besides this. there are many forms of unfair com-
mercial practices which are not rib& but are shot through by the
spirit of ribii, that is. profiteering and these have been called "the
concealed ribii" by Ibn Qayyim. It is of this latter kind of ribii
that the following comment of the great expert on HadF&. Ibn
Hajar al-'Asqalani, comes true :

(The term ribn can be applied t o every forbidden commer-

cial practice.)
In the collections of hadF& and ii@ar one would notice that
an effort has been made t o formulate this very concept of ribii.
However, we cannot apply the juristic term 'ribii' t o all the immoral
forms of trade practices and we would do well t o keep in view
the sound principle enunciated by Ra&id Ri@ in the words :

(It is necessary t o make a distinction between the injunc-

tions that are based on the clear text [nqgl of the Qur'iin on
the one hand and those which are based on Traditions narrated
by a single chain of reporters [riwiiyot a l - A h d l and on the
conclusions arrived a t by the jurists by the process of analogy
[qiyiisl on the other.)
Moreover, in accordance with well-recognised juristic principle
of masiilib mursalah (measures based on public weal) we should find
out which forms of human dealings in modern times are morally
more destructive, nearer t o the spirit of ribii and. therefore, worthy
of greater attention in so far as they fall within the category of
things which lead t o forbidden acts. Landlordism, feudalism,
 FAZLUR RAHMAN 37

profiteering and hoarding are surely much nearer t o the manifest-

riba than the bank-interest. To pass any judgment contrary to the
opinion we have expressed merely on grounds of verbal resemblance
would involve the very same error t o which al-Jassiis has drawn
attention in the words cited above and which we would like to
repeat in view of their importance :
L j Y I J@I 3 ; s f1+-3 by! JYALYI pY
- 4 4 @I jUI 41 4 Y 3 iU
(It is not right to argue in general form a term used in the
-Shari'ah with a view to declaring some business-dealing as coming
within the category of forbidden acts, except when it is established
that the particular term used in the &arigah is applicable to the
business dealing in question.)

I11
ROLE OF THE INTEREST-RATE I N THE PRESENT-DAY ECONOMY

In the modern science of Economics the rate of interest occupies

the same place as price and performs the all-important function
that any price-mechanism performs, viz., of regulating the supply
and demand of credit and rationing it among the customers. If the
rate of interest, i.e., the price of loaning money, is reduced to zero,
then we are faced with a limited supply and an infinite demand.
It would become impossible to control the rationing of credit
available, so to say, and to assign priorities. Especially in a society
like ours where there is a great danger of nepotism and corruption,
it is well-nigh impossible to conceive that correct priorities and
correct amounts will be the order of the day with the optimum
use of the available funds for development. At present, however,
the rate of interest functions as the objective standard of allocating
the credit principal and the real need for a loan is expressed by
readiness to pay the proper price. i.e. the interest-rate. The common
belief that the interest-rate is arbitrary is absolutely groundless,
simply because it is genuinely a price as any other price. Mawdadi,
explaining the theory which points to the law of supply and demand
as the basis of bank-interest, says, "Just think what this comes to
mean. The capitalist does not straightforwardly and by fair
means enter into partnership with the businessman, and obtain his
rightful share in the profits earned by him (the businessman). On
the other hand, he makes a rough estimate of the minimum profit
38 RIB^ ANDINTEREST
likely to be made by the businessman. Therefore. he says t o him-
self, 'I should receive so much interest on the money I loan out
t'o him'. The businessman too, on his part, makes a rough estimate
of the maximum profit he is likely t o earn from the amount of
credit he is going t o obtain. Therefore, he says t o himself. 'the
interest that I pay should not exceed beyond this point'. Thus both
the debtor and the creditor indulge in peculation."^^
I t seems that Mawdrjdi has not made a serious study of our
present banking system. The kind of picture he has in mind of
haggling and of mutual adjustment between the needs of the debtor
and the creditor may be true of the usurious practices of the
baniyii,* but is not a t all true of the financial system of the banks.
The prices in petty business may rise or fall, and. in fact they
usually do so, but the rate of interest does not rise or fall even by
half or one-fourth per cent except under the stress of diverse and
multiple economic factors, and such a rise or fall in the rate of
interest itself becomes an important economic factor. The fixation
and determination of the rate of bank-interest is not the result of
any simple mutual understanding between the debtor and the
creditor but the outcome of many complex economic factors.
In the opinion of some economists, the rate of interest can be
brought down t o zero. In fact the general trend of the economic
system has been towards the lowering of the rate of interest. But
this can come about only if the volume of the real wealth and
credit capital in the country multiplies t o such an extent that a
state of equality or near-equality comes to exist between supply
and demand of money and credit becomes very easy. But this has
not been achieved yet even by highly developed countries like the
United States. T o bring about such conditions in our country,
we shall have t o make untiring efforts for the production of
real wealth and for the formation of capital and unless we succeed
in attaining this objective, we shall have to put up with the present
rates of interest.
Economists of the Communist school of thought hold a very
different view of the rate of interest. According t o their theory,
it is labour only and not capital which produces "surplus value,"
i.e. the profit. On this theory, there is no basis a t all even for
the profits of private business not t o speak of the profits made by
the banks or the bank-interest. However, the present fixal system,
Hindu money-lender and grocer-(Ed.)
 FAZLUR RAHMAN 39

as it is functioning in Soviet Russia, Yugoslavia and other Commu-

nist countries. has to accept bank-interest as a necessity contrary
t o its basic economic theory. The Communists explain this ano-
maly by treating the present conditions as a period of transition in
which there can be no escape from bank-interest. They argue
that when they have attained their highest ideal, that is of estab-
lisbing the Communist sbciety organised on the principle, "to
every man according t o his needs and from every man according
t o his capacity," the present banking system with its rates of in-
terest will be abolished. Apart from the question whether or not
the system envisaged by Communism is practicable, the difficulty
is that if we accept the Communist system. we shall have, also, t o
accept all its regimentations and the coercion employed by it,
which, we think, would be resisted by the majority of our people.
As we have, however. explained in the preceding sections of
this paper, the general Qur'iinic teaching wants t o devetop the
maximum of co-operative spirit and socio-economic justice, which is
called gadaqah by the Qur'an and which must not be confused
with the begging and giving of alms. The co-operative spirit
envisaged by the Qur'fn was well illustrated by the muli&at
established b y , the Prophet after his migration t o
between the Muhajiriin of Mecca and the local A+r. En the
Welfare Co-operative Commonwealth of Islam, based on the true
spirit of 3adaqah. bank-interest will certainly be eliminated, because
in this ideal Commonwealth, there will be competition among men,
but only for virtue and mutual help. To strive t o achieve this
ideal is the noblest jihiid of our times. But if we are t o carry on
this jihad for the setting up of the Islamic Welfare Co-operative
Commonwealth. it is equally necessary that we should not close
our byes t o the present realities, howsoever unpalatable they may
be. The abolition of interest presupposes the highest degree
imaginable of co-operative spirit and, therefore, cannot be imple-
mented today unless the country's economy and production are
t o be left in the direst jeopardy. A t present this type of Islamic
spirit of co-operation is wanting in our society and, indeed, we
are now a t the opposite pole from the social order envisaged by
the Qur'an. This being the case, it will become particularly impos-
sible for the Government to raise interest-free loans for its basic
non-profit-making projects, such as roads, hospitals. schools, etc. No
economy can be built today, nor was one built by our forefathers
40 RIB^ AND INTEREST
on qurQ basan (qardah-yi basanah), although private institutions
should be encouraged in this direction for purely philanthropic
purposes. We, therefore, conclude that the abolition of interest in
the present state of our economic development would be a cardinal
error.

CONCLUSION
11
1. (a) The clear words of the Qur'zn. Consume not ribii with
631
continued redoubling (-&& b ~ d l IX Y)**.
(b) The chronological order in which the verses prohibiting
tibii were revealed.
( c ) The historical traditions concerning the nature of ribii
going back to the eminent tiibi'i commentators of the
Qur'sn.
(d) The kdT&-material describing the historical context in
which the verse "1.3+31 2 L l>jj (remit what is left
of riba)" was revealed,--all this evidence establishes
the following definition of ribii :
.a
Ribii is an exorbitant increment whereby the capital sum
is doubled several-fold, against a fixed extension of the term of
payment of the debt."
2. The prohibition of this ribci by means of law is a religious
necessity.
3. The Qur'sn has declared that the opposite of tibii is sadaqah
which is by no means a form of beggary. In view of this it is the
moral duty of the Muslims t o build up a system of economy based
on :adnqah, i.e. co-operation and mutual consideration. Co-opera-
tive effort of the Government and the people is needed to achieve
this goal.
4. The basic moral idea under1jing the Qur'znic prohibition
of ribii has been given a wider extension and application in the
badZ& literature, but the contradictions and inconsistencies in the
ribii-ha&& and the evolutionary trend in this literature leading t o
an ever-increasing rigidity vitiate its authenticity and authority.
5. The passion for ~adaqahinculcated by the Qur'sn and the
way in which the bad?&-material supports and elaborates this idea
lead to the conclusion that all immoral forms of financial and
economic transactions fall under the category of what Ibn Qayyim
calls "concealed ribb'. But it is necessary t o maintain a distinc-
tion between the Qur'znic ribii, which in fact is the legal rib& and
 fi
FAZLUR RAHMAN 41

the term 'ribii' as used in later times and by later writers.

6. The system of economy which the Qur'sn requires us to
establish, being based on the spirit of co-operation, the further
nourishment and development of this spirit in the right manner and
the reconstruction of society in accordance therewith would make
bank-interest and the present banking system quite superfluous
which is just what the spirit of the Qur'Zn and the Sunnah requires
of us.
7. As long as our society has not been reconstructed on the
Islamic pattern outlined above, it would be suicidal for the economic
welfare of the society and the financial system of the country and
would also be contrary to the spirit and intentions of the Qur'an and
Sunnah to abolish bank-interest.
8. In accordance with the principle of gjJ;or "graduation"
and or "the easing of the way", it would be necessary to enact
legislation against such grave social inequities as feudalism and
hoarding, etc. before proceeding to abolish bank-interest.
9. I t would be necessary for every citizen of Pakistan to
work arduously and with an untiring zeal to reach the desirable
goal of reducing bank-interest to the zero point, in other words, to
eliminate it completely. For this end, it would be necessary to
increase the volume of real wealth and credit capital in the country
t o such a point that an equality or near-equality comes to exist
between the supply and demand of money in credit, and credit
becomes very easy. In such ideal circumstances the motive for
bank-interest, and indeed, the profiteering motive may become
extinct.
10. The measures adopted by the Government and the collec-
tive efforts made by the Muslims in general, alone will bring into
existence that Welfare Co-operative Commonwealth which is the
only way to establish the economic system of Islam in the present
modern conditions.
NOTES
Al-Suyayi. a l - I t q ~ n f ; 'Uliim al-Qur'Zn. Matba'ah Miisawiyah. Cairo. 1278
A . H.. I : 11-22.
Gibbon. E.. History of the Decline and Fall of the Roman Empire. Chapter
XLVL
Malik, Muwapa', Kitiib (henceforth K.) al-buyi5'. &b (henceforth B.) al-ribZ.
Mawdiidi, Sayyid Abu 'I-A'h, Siid, Lahore, 1961.258, n. 2.
Shafi'. Mufti Muhammad. Mas'alah-i Siid. Karachi, 1380 A. H., 9-10.
Tabari, Tafsjr. Cairo, 1374 A . H., VI : 22-24.
42 RIBAA N D INTEREST
7. Zbid.. V I I : 204.
8. Ibid.. V I I : 204-5.
9. 'Ali al-Muttaqi. Kanz af-'Ummdl. Hyderabad. 1312 A. H.. I1 : 231,
(No. 4954).
10. Al-Buaziri. SaGh, K. al-Tafsir. Siirah al-Baqarah : ibid.. K. al-buvii'.
B. Mu'kil al-ribii.
11. Ibid.. K. al-Tafsir. Siirah al-Baqarah.
.
12. Zbid K. al-Tafsir. Sfirah Barh'ah.
13. Al-Suytiti. al-Itqiin. op. cit.. I : 33-5.
14. Tabari, Tafsjr. Cairo. 1330 A. H.. XXI: 29-31 : al-S~~pEti.al-Durr al-
Mant&r. Tehran. 1377 A. H.. V: 156 : Baydzwi, Tafsis, Istanbul. 1316
A. H..I1 : 247.
15. Al-Bu&~ti. Sahib. K. 01-Tafsir, Siirah al-Rlm.
16. Al-Suyit!i. al-ItqEn, op. cit.. I :23; Muslim, Sahib. K.al-Tafsir.
17. Al-Suyiip' ibid.. I :35.
18. AI-Tabari. Tafsjs. D l r al-Ma'itrif. Cairo. IX : 520.
19. Mawdii'di. Siid. Lahore. 1954. 1: 162-69.
20. Ibid.. 165-166.
21. Zbid.. I : 51,and latest ed. (January. 19611. 160.
22. The chapter referred t o was first published in the form of an article in
Mawdiidi's Urdu journal Tarjumiin al-Qur'iin, Lahore. August 1939.
23. Al-Buakhiri. Sahih, K . B. nl-buyii'. al-rib5 : Muslim. Sa@h, as above : Nass'i.
Sunanas above: Dsrimi. Sunan. as above: Ibn Mijah. Sunan. Abwiib al-Tijiirdt:
Ahmad b. Hanbal, Musnad, Cairo. 1313 A. H., V : 200. 202. 204. 206,
208 and 209.
As per note 23 above, except for Musnad of Ahmad b. Hanbal.
See the isndd of the badit& quoted above, n. 24.
a ~ f i ' i .al-Risdlah. Bnlaq, 1321 A. H.. 40.
Mawdbdi. S l d , Lahore. 1961. 148-49.
Ibid.. 149.
MSlik. Muwa@aV,K. al-buyiia.B. ma yajiiz min bay' al-QayawZn, etc.
Aba Dawsd, Sunan. K. al-buyii'. B. fi 'I-ru@sah; Ahmad b. Hanbal. Musnad.
op. cit., 11: 171.
Al-Bayhaqi. al-Sunan al-Kubrii. Hyderabad, 1352 A. H.. V : 288.
A l - T i r m i a . Jdmi'. K . al-buyiil. B. mii jii'a f i karzhiyyah Cay', al-3ayawiin bi
'I-hayawiin nasl'atan.
33. Abii Diiw~d.Sunan. K. al-buyii'. B. al-Qayawdn bi 'I-hayawan nasi'atan.
Nasii'i. Sunan. a s above; Darimi, Sunan, (Damascus. 1349 A. H.. 11: 254:
Ibn M.3 jah. Sunan, A b w ~ bal-Ti jiirlt. B. al- 3ayawiin bi 'I-hayawiin nasi'atan:
al-Bayhaqi, al-Sunan al-Kubrii. op. cit.. V : 289 ; al-Ticmidhi. Jiiml'. Abwiib
al-buyii', B. ma jz'a fi kariihiyyath bay' al-Qayawiin bi 'I-3ayawa'n nasi'atan.
34. Ahmad b. Hanbal. Musnad. op. cit.. V : 12, 19. 21. 22 and 99.
35. Muslim, SaBh, K . al-buy%, B. kirii' al-or&
36. Zbid.. 8. al-mu&iibarah.
37. 'Ayni. 'Umdat aI-Qarr. I e t ~ m b o l 1310
. A. H.. V: 724.
38. Ibid.
 FAZLUR RAHMAN

39. Jame'at-i Islami Publication No. 20. Lahore, n. d.

40. Al-Bayhaqi. Sunan, op. cit.. V : 189-287.
41. Tiij al-'Arm and Lisiin al-'Arab, s. v.
42. Al-Bayhaqi. ibid., 349-50.
43. lbid.. 350.
44. Al-Suyiiti. al-Jiimi' al-Saghir, Cairo. 1954. 94.
45. Al-Zirikli, al-A'llm. ~ a T o .1373-78 A. H., s. v. H?irit& b. Muhammad
Abi Usamah.
46. 'Ali al-Muttaqi. Kanz al-'Ummiil. op. cit.. I V : 665 (No. 8707).
47. 'Azizi, al-Sirlj al-Munir. Cairo. 1257 A. H., I1 : 93.
48. Shafi'. Mufti Muhammad. Mas'alah-i SPd, op. cit., 10.
49. Ibid.. 79.
50. Ibn al-A&r. Kitiib al-Nihiiyah fi B a r i b al-Had@ wa'l-Agar. Cairo.
1322 A. H., I1 : 66.
51. Abii Bakr Muhammad Ibn al-'Arabi. Ahkam al-Qur'iin. Cairo. 1957. I : 242.
52. AI-Jacz~s.Aba Bakr. Ahkam al-Qur'iin. Istambol, 1335. A. H.. I : 464.
53. Ibid.. I : 469.
54. Mawdndi, op. cit.. 139.
55. Al-Ja~sHs.of cit. I :464-65.
56. s a f i ' , op. cit.. 10.
57. Mawdadi. op. cit.. 1961. 136.
58. Al-Jass~s.op. cit.. 624.
59. Mawdiidi, op. cit.. 299.
60. s a f i ' . op. cit. 10-11;Mawdcdi, op. cit., 147-55.
61. Muslim, Sahih, K. al-buyii'. B. man istislaf, etc.
62. lbid.
63. Malik. Muwaiga'. K. al-buyii'. B. m l yajiiz min al-salaf; a l - B u a ~ r iSahib,
.
K. al-istigriid, B. ipiqrad al-ibil: Aha Dawiid. Sunan, K. al-buyti'. B.
al-qadi; Ibn M ~ j a h Sunan.
. AbwZib al-TijiirZt; al-Tirmi&i. Jami. K . al-buyii',
B. ma ja"a f i istiqriid al-ba'ir, etc ; Nadi'i. Sunan. K. al-buyii'. B. istislo'f al-
hayawln wa isriqriidzh; Darimi, Sunan. K. a2-buyii'. B. fi 'I-ru&sah f i
istigrad al-&yaw&; Ahmad b. Hanbal. Musnaa, op. cit.. V I : 390.
61. See preceding note.
65. Aba Dawad. Sunan. K . al-buyii'. B. busn al-ga&' ; Ahmad b. yanbal.
Musnad, op. cit.. I11 : 319.
66. Ibn Qayyim, I'lam al-Muwaqqi'in. Delhi, 1313 A. H.. 1: 200.
67. Rashid Rid& Tafsir al-Maniir. Cairo, 1367 A. H., I11 : 15.
65. Ibn Hajar. Fat4 al-Biiri. Cairo. 1319 A. H.. IV :250-1.
69. Rabid Rida. Tafsir, op. cit., I11 : 113.
70. Mawdiidi. op. cit., 78-79.