The word “interest” refers to the fixed increase demanded
over and above a sum of loan. At first sight, there does not seem to be any
difference between it and rent. However, a deep deliberation reveals the stark
difference between the two: rented out items can be used while keeping them
intact; however, money cannot be used in this way; it is in fact used up and
after expending it, it is needed to be produced again. Therefore, if something
in addition is demanded over it, this in fact becomes an oppression. Since this
difference between interest and rent is subtle, and human intellect can falter
in understanding this difference, the Almighty has delineated the truth in this
matter: In the sharī‘ah he has given mankind through his prophets, He has
informed them that demanding a fixed increase over the lent amount is unjust and
hence not allowed. It is for this very reason that interest has remained
prohibited at all times and in all the sharī‘ahs revealed by the Almighty. The
Qur’ān has explicitly forbidden it. There is no difference of opinion in this
matter.
However, the religious legality of the system of banking
which prevails in our societies has recently come under discussion. It is
contended that since the bank only receives a portion from the profit of a
commercial venture it had financed on the basis of a loan hence the very reason
for which interest was regarded as prohibited does not exist in the banking
system. This view has been put forth by some scholars of Egypt and Syria.
Mawlānā Wahīd al-Dīn Khān (b. 1926 AD), a celebrated scholar and preacher from
India too, has corroborated it to some extent in his book Fikr Islāmī. In my
opinion, this view of the scholars can be considered intellectually convincing;
however, it is essential for this that the following remedial measures be
introduced in the banking system.
Firstly, if a commercial venture financed by a bank loan
runs into losses or needs to be discontinued for some reason, the demand for
profit by the bank should cease that very day. It should only demand the
principal amount.
Secondly, if things are being sold on installments, then
until these installments are complete, the bank should remain a partner in the
ownership of the sold item, fulfill the rights of ownership and receive rent on
it.
Thirdly, in a loan given for non-commercial purposes except
for inflationary adjustments, no interest should be demanded on it.
An important issue relates to paying interest on loans
acquired for personal and commercial needs. In other words, there are people who
do not devour interest but are forced to pay it on such loans. It is generally
thought that paying interest too is prohibited in the same manner as consuming
interest is. Our scholars also hold this view. In reality, there is no basis of
this opinion in the Qur’ān and Hadīth. Not at one place has the Qur’ān condemned
people who pay interest; it has, in fact, regarded them to be the oppressed; it
has also urged the lenders to give respite to such borrowers if they are facing
some financial constraint. No doubt, in a narrative, those who make others
devour interest are also regarded to be equal criminals;
however, people have failed to understand the real meaning of this narrative. It
refers to people who are the agents of professional lenders and in this capacity
hunt for potential customers for their masters. As such, they are guilty of
co-operating with them in this sin. In other words, this narrative does not
relate to people who borrow on interest.
(Translated from Maqāmāt by Shehzad
Saleem)
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