Riba is prohibited in Islam as it appears explicitly in the Holy Qur’an. There is complete unanimity among all Islamic schools of thought regarding the prohibition of riba. Since the Qur’an is the undisputed source of guidance in Islam for all Muslims, there is unanimous agreement on the fact that Islam has forbidden the practice of riba. The debate on whether interest is riba or not has been settled. The ulama have made crystal clear that interest is riba. The modern banking system is organized on the basis of a fixed payment called interest. That is why the practices of the modern banking system are in conflict with the principles of Islam which strictly prohibit riba. Islam is opposed to exploitation in every form and stands for fair and equitable dealings among all men. To charge interest from someone who is constrained to borrow to meet his essential consumption requirement is considered an exploitative practice in Islam. Charging of interest on loans taken for productive purposes is also prohibited because it is not an equitable form of transaction
RIBA IN THE HOLY QUR'AN
1. (Surah al-Rum, verse 39) That which you give as riba to increase the peoples' wealth increases not with God; but that which you give in charity, seeking the goodwill of God, multiplies manifold. (30:39).
2. (Surah al-Nisa', verse 161) And for their taking riba even though it was forbidden for them, and their wrongful appropriation of other peoples' property, We have prepared for those among them who reject faith a grievous punishment. (4:161).
3. (Surah Al 'Imran, verses 130-2) O believers, take not doubled and redoubled riba, and fear God so that you may prosper. Fear the fire which has been prepared for those who reject faith, and obey God and the Prophet so that you may receive mercy. (3:130-2).
4. (Surah al-Baqarah, verses 275-81) Those who benefit from riba shall be raised like those who have been driven to madness by the touch of the Devil; this is because they say: "Trade is like riba" while God has permitted trade and forbidden riba. Hence those who have received the admonition from their Lord and desist, may have what has already passed, their case being entrusted to God; but those who revert shall be the inhabitants of the fire and abide therein for ever. (275).
RIBA IN HADITH
1. From Jabir: The Prophet, may peace be on him, cursed the receiver and the payer of riba, the one who records it and the two witnesses to the transaction and said: "They are all alike [in guilt]." (Muslim, Kitab al-Musaqat, Bab la'ni akili al-riba wa mu'kilihi; also in Tirmidhi and Musnad Ahmad).
2. Jabir ibn 'Abdallah, giving a report on the Prophet's Farewell Pilgirmage, said: The Prophet, peace be on him, addressed the people and said "All of the riba of Jahiliyyah is annulled. The first riba that I annul is our riba, that accruing to 'Abbas ibn 'Abd al-Muttalib [the Prophet's uncle]; it is being cancelled completely." (Muslim, Kitab al Hajj, Bab Hajjati al-Nabi, may peace be on him; also in Musnad Ahmad).
3. From 'Abdallah ibn Hanzalah: The Prophet, peace be on him, said: "A dirham of riba which a man receives knowingly is worse than committing adultery thirty-six times" (Mishkat al-Masabih, Kittab al-Buyu', Bab al-riba, on the authority of Ahmad and Daraqutni). Bayhaqi has also reported the above hadith in Shu'ab al-iman with the addition that "Hell befits him whose flesh has been nourished by the unlawful" (ibid).
4. From Abu Hurayrah: The Prophet, peace be on him, said: "On the night of Ascension I came upon people whose stomachs were like houses with snakes visible from the outside. I asked Gabriel who they were. He replied that they were people who had received riba." (Ibn Majah, Kitab al-Tijarat, Bab al-taghlizi fi al-riba; also in Musnad Ahmad).
5. From Abu Hurayrah: The Prophet, peace be on him, said: "Riba has seventy segments, the least serious being equivalent to a man committing adultery with his own mother." (Ibn Majah, ibid).
6. From Abu Hurayrah: The Prophet, peace be on him, said: "There will certainly come a time for mankind when everyone will take riba and if he does not do so, its dust will reach him." (Abu Dawud, Kitab al Buyu, Bab fi ijtinabi al shubuhat; also in Ibn Majah).
7. From Abu Hurayrah: The Prophet, peace be on him, said: "God would be justified in not allowing four persons to enter paradise or to taste its blessings: he who drinks habitually, he who takes riba, he who usurps an orphan's property without right and he who is undutiful to his parents." (Mustadrak al Hakim, Kitab al-Buyu).
Translation – Bahasa Melayu
Riba adalah dilarang sama sekali (haram) dalam Islam kerana penegahannya telah dimuatkan di dalam kitab suci Al-Quran serta hadis-hadis (seperti di atas). Para ulama juga telah sepakat tentang hukum berkenaan riba. Sistem perbankan moden adalah berlandaskan bayaran tetap yang dinamakan faedah, dan oleh sebab itu dasar penbankan moden ini bercanggah dengan prinsip Islam yang menegah riba. Islam menentang sebarang bentuk penindasan dan berlandas kepada keadilan. Untuk mengenakan faedah kepda seseorang yang meminjam untuk kegunaan/keperluan asas dianggap sebagai suatu bentuk penindasan dalam Islam. Mengenakan faedah untuk pinjaman bagi kegunaan produktif juda dilarang kerana is bukanlah transaksi yang adil.
RIBA IN THE HOLY QUR'AN
1. (Surah al-Rum, verse 39) That which you give as riba to increase the peoples' wealth increases not with God; but that which you give in charity, seeking the goodwill of God, multiplies manifold. (30:39).
2. (Surah al-Nisa', verse 161) And for their taking riba even though it was forbidden for them, and their wrongful appropriation of other peoples' property, We have prepared for those among them who reject faith a grievous punishment. (4:161).
3. (Surah Al 'Imran, verses 130-2) O believers, take not doubled and redoubled riba, and fear God so that you may prosper. Fear the fire which has been prepared for those who reject faith, and obey God and the Prophet so that you may receive mercy. (3:130-2).
4. (Surah al-Baqarah, verses 275-81) Those who benefit from riba shall be raised like those who have been driven to madness by the touch of the Devil; this is because they say: "Trade is like riba" while God has permitted trade and forbidden riba. Hence those who have received the admonition from their Lord and desist, may have what has already passed, their case being entrusted to God; but those who revert shall be the inhabitants of the fire and abide therein for ever. (275).
RIBA IN HADITH
1. From Jabir: The Prophet, may peace be on him, cursed the receiver and the payer of riba, the one who records it and the two witnesses to the transaction and said: "They are all alike [in guilt]." (Muslim, Kitab al-Musaqat, Bab la'ni akili al-riba wa mu'kilihi; also in Tirmidhi and Musnad Ahmad).
2. Jabir ibn 'Abdallah, giving a report on the Prophet's Farewell Pilgirmage, said: The Prophet, peace be on him, addressed the people and said "All of the riba of Jahiliyyah is annulled. The first riba that I annul is our riba, that accruing to 'Abbas ibn 'Abd al-Muttalib [the Prophet's uncle]; it is being cancelled completely." (Muslim, Kitab al Hajj, Bab Hajjati al-Nabi, may peace be on him; also in Musnad Ahmad).
3. From 'Abdallah ibn Hanzalah: The Prophet, peace be on him, said: "A dirham of riba which a man receives knowingly is worse than committing adultery thirty-six times" (Mishkat al-Masabih, Kittab al-Buyu', Bab al-riba, on the authority of Ahmad and Daraqutni). Bayhaqi has also reported the above hadith in Shu'ab al-iman with the addition that "Hell befits him whose flesh has been nourished by the unlawful" (ibid).
4. From Abu Hurayrah: The Prophet, peace be on him, said: "On the night of Ascension I came upon people whose stomachs were like houses with snakes visible from the outside. I asked Gabriel who they were. He replied that they were people who had received riba." (Ibn Majah, Kitab al-Tijarat, Bab al-taghlizi fi al-riba; also in Musnad Ahmad).
5. From Abu Hurayrah: The Prophet, peace be on him, said: "Riba has seventy segments, the least serious being equivalent to a man committing adultery with his own mother." (Ibn Majah, ibid).
6. From Abu Hurayrah: The Prophet, peace be on him, said: "There will certainly come a time for mankind when everyone will take riba and if he does not do so, its dust will reach him." (Abu Dawud, Kitab al Buyu, Bab fi ijtinabi al shubuhat; also in Ibn Majah).
7. From Abu Hurayrah: The Prophet, peace be on him, said: "God would be justified in not allowing four persons to enter paradise or to taste its blessings: he who drinks habitually, he who takes riba, he who usurps an orphan's property without right and he who is undutiful to his parents." (Mustadrak al Hakim, Kitab al-Buyu).
Translation – Bahasa Melayu
Riba adalah dilarang sama sekali (haram) dalam Islam kerana penegahannya telah dimuatkan di dalam kitab suci Al-Quran serta hadis-hadis (seperti di atas). Para ulama juga telah sepakat tentang hukum berkenaan riba. Sistem perbankan moden adalah berlandaskan bayaran tetap yang dinamakan faedah, dan oleh sebab itu dasar penbankan moden ini bercanggah dengan prinsip Islam yang menegah riba. Islam menentang sebarang bentuk penindasan dan berlandas kepada keadilan. Untuk mengenakan faedah kepda seseorang yang meminjam untuk kegunaan/keperluan asas dianggap sebagai suatu bentuk penindasan dalam Islam. Mengenakan faedah untuk pinjaman bagi kegunaan produktif juda dilarang kerana is bukanlah transaksi yang adil.
