Q.16 Define Usury and state the causes for which usury has been disallowed and trade is permitted in Quran and Sunnah.
Usury means increase addition, expansion or growth that must be paid by the borrower to the lender along with principle amount as a condition for the loan or for an extension of its maturity.
The Holy Quran has condemned bitterly usury and placed those who took usury would be dealt with severe punishment from God, the Holy Quran condemned usury severely and advised Muslim to keep away from usury if they wished their own welfare.
The Holy Prophet (Peace be upon him) also condemned not only those who take usury, but also those who give usury and those who record the transactions or act witness to it. They Holy Prophet (Peace by upon him) equated the talking of usury to committing adultery thirty six times or being quality of incest with one own’s mother. Thus*Quran and Sunnah had condemned usury sincerely.
“OH BEUVERS, WHATEVER IS RESIDUE FROM RIBAA, LEAVE IT IF YOU ARE MOMIN (MUSLIM) IF YOU WILL NOT DO SO, LISTEN THAT THIS IS THE DECLARATION OF WAR FROM ALLAH ”
Allah says on another place in Quran
” IF YOU LEAVE THE INTEREST YOU WILL GET REAL WEALTH. NEITHER YOU BE
TYRYNN TO OTHER NOR OTHER SHOULD BE TYRYNN ON YOU.”
There are two important phrases in the above lines; first “whatever is residue” and second “leave it”. In other words, Allah does not want even a small part of interest to be retained by any Muslim, The meaning of leave the interest is that the creditor should get only the principle amount of loan.
If some one wants to gives his capital to other for the purpose of business he will have to decide first that whether it is being given for sharing the profits of the debtor or for aiding him financially. If he wants to be the co-sharer in the profits, he will have to adopt Islamic system of “Modaraba” or “Musharika”. In other words, he wills the profits and has to share also the losses.
If he loan is extended as help, it is necessary that the credit or should withdraw from all the demands and should take it as help only. In other words when the loan is refunded to him, he should accept only the amount which he advanced. In accordance with Islam capital is subject to loss and whoever provides capital he will have to bear the risk of loss also.
According to experts, if the characteristic of the entrepreneur is that he bears the business risk, according to Islam, this is the characteristic of capital. The fore, capital and entrepreneur are the same in Islam and their share in the distribution of wealth is profit not the interest. If the characteristic of the entrepreneur is to organize and plan the business, this activity includes in the labour then he should rightly be regarded as one of the factors of production.
In accordance with Islam, all wealth is the property of Allah and He has made a person the custodian of this wealth. Therefore, he will not be allowed to go beyond the bounds acquiring wealth but will have followed the Islamic principles and regulations in this behalf. Islam not therefore, not made any thing Jai’z that is mutually agreed upon by the two parties if it is injurious and evil effect caster for the sotiety as a whole. Interest gambling bribe, shamelessness …prostitution.etc, take place by mutual agreement but ISlam has declared all of them as Haraam be caused these agreements affect the society adversely. During the period of “Jaahiliat” the people used to object asunder:
Holy Quran responded this in brief
“…AND ALLAH HAS DECLARED BEI AS HALAL AND INTEREST AS HARAAM”.
No argument has been extended in this order of Allah for making interest Haraam but an order has been imposed to be followed by every Muslim as his duty. No argument can be asked for. Declaring interest Haraam is such a rational decision that evil effects of Capitalistic Society are eliminated. This is the reason also that no need is there to adopt Socialism Pro/. Lui Nelson has rightly pointed out.
“In the collision of Capitalism and Socialism, only that culture and civilization will be survived which not only takes interest as unjust but can also implement in practical life”.
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