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Abstract
An important instruction found in narratatives of the Prophet of Islam (sws)
regarding Ribā (interest) is reported in the following way: ‘If you give gold,
then receive back the same gold: the same weight and the same quality; and if
you give silver, then receive back the same silver: the same weight and the same
quality, because the one who gives more or expects more, then [he should know
that] that is exactly Ribā.’ (Muslim 1981, p. 211) In another narration he is
reported to have said: ‘If you will sell gold for silver then there is a danger
of interest in it. [Likewise, if you will sell] wheat for wheat, barley for
barley and dates for dates, the result would be no different; [there is no way
of avoiding the danger of Ribā in a barter transaction] except that the exchange
be spot’. (ibid., p. 208)
The two narrations mentioned above along with many other similar ones have
led many Muslim writers to conclude that apart from interest on credit
transactions (called Ribā al-Nasī’ah), the Prophet (sws) in these narrations,
has prohibited another kind of Ribā: Ribā al-Fadl (interest in excess). In their
opinion this kind of Ribā is associated with spot exchange of dissimilar
commodities. According to them, the Prophet (sws) had strongly emphasized that
while exchanging the same commodities like gold for gold, silver for silver,
wheat for wheat, barley for barley etc. on the spot it is extremely important
that equal quantity and the very same quality of these goods should exchange
hands. Many Muslim writers find themselves at a loss to appreciate the very
suggestion that two individuals can ever contemplate the possibility of entering
into an exercise of exchanging two identical commodities on spot. However, most
of them still accept that Ribā al-Fadl is another form of Ribā prohibited in
Islam by presenting one unconvincing rationale for their understanding of the
concept or another.
Javed Ahmad Ghāmidī has pointed out that the narrations claimed to be
condemning Ribā al-Fadl have been incorrectly understood and that if their
correct context is properly explained, they would appear to be clearly
explaining the idea of the same concept of Ribā that is mentioned in the Qur’ān
(Ribā al-Nasī’ah). This clarification about Ribā is extremely important for the
academic world to acknowledge, because as it stands today, the literature on
Islamic Finance and Economics is presenting very strange applications of the
concept of Ribā al-Fadl, which are not only unnecessarily confusing but are also
being applied in areas of business and finance where their application was never
intended. This article is an explication of Ghāmidī’s views and an academic case
for the unacceptability of Ribā al-Fadl as an Islamic term.
1. Introduction
The Qur’ān, the primary book of guidance for Muslims, prohibits believers
from entering into Ribā-based financial arrangements.
The understanding of a vast majority of Muslim scholars on this injunction is
that it outlaws all forms of interest-based borrowing and lending (Siddiqi 1983,
9).
However, most Muslim scholars include within the scope of the prohibition of
Ribā
another type of it, which they call Ribā al-Fadl. Since the entire understanding
of the notion of Ribā al-Fadl is based on the incidents from the life of the
Prophet (sws), God’s mercy be on him,
reported in Ahādīth,
and the Qur’ān is completely silent on the subject, the alleged understanding of
Ribā is also called Ribā al-Sunnah (Ribā, whose understanding has been derived
from the example of the Prophet (sws)).
This article attempts to show that the Prophet (sws) clarified only the meanings
of the Qur’ānic concept of Ribā. Furthermore, it also explains that some of the
statements of the Prophet (sws) and incidents reported from his life relevant to
this area have been erroneously construed as conveying the understanding of
another category of Ribā, the traditional Muslim understanding of which has
caused unnecessary confusions.
2. What is Ribā Al-Fadl
Ribā al-Fadl is described as an unlawful excess in the exchange of two
counter-values where the excess is measurable through weight or measure. The
concept is based on some Ahādīth according to which if gold, silver, wheat,
barley, dates, and salt are exchanged against themselves, they should be spot
and equal and specified. If these conditions are not found, this transaction
will become Ribā al-Fadl. (Usmani, I. 2002, p. 253)
3. Ahādīth mentioning Ribā al-Fadl
Although there are myriad Ahādīth on the subject of Ribā al-Fadl mentioned in
the books of Hadīth literature, the following represent almost all of them,
since those missed almost repeat what has been mentioned in these Ahādith.
--Ribā Al-Fadl in Gold, Silver, Wheat etc:
i.a.
Narrated ‘Umar: The Prophet said, ‘The selling of wheat for wheat is Ribā except
if it is handed from hand to hand and equal in amount. Similarly the selling of
barley for barley is Ribā except if it is from hand to hand and equal in amount,
and dates for dates is Ribā except if it is from hand to hand and equal in
amount.’ (Bukhārī 1985, h. 2026)
ii.a. Narrated Ibn Shihāb that Malik Ibn Aws said: ‘I was in need of change
for one-hundred Dinars. Talhah Ibn ‘Ubaydullah called me and we discussed the
matter, and he agreed to change (my Dinars). He took the gold pieces in his
hands and fidgeted with them, and then said: ‘Wait till my storekeeper comes
from the forest.’ ‘Umar was listening to that and said: ‘By Allah! You should
not separate from Talhah till you get the money from him, for Allah’s Apostle
said: ‘The selling of gold for gold is Ribā except if the exchange is from hand
to hand and equal in amount, and similarly, the selling of wheat for wheat is
Ribā unless it is from hand to hand and equal in amount, and the selling of
barley for barley is Ribā unless it is from hand to hand and equal in amount,
and dates for dates, is Ribā unless it is from hand to hand and equal in
amount’. (ibid. h. 2029)
iii.a. Narrated Abū Hurayrah: The Prophet said: ‘If you give gold, then
receive back the same gold: the same weight and the same quality; and if you
give silver then receive back the same silver: the same weight and the same
quality, because the one who gives more or expects more, then that is exactly
Ribā’. (Muslim 1981, p. 211)
iv.a. Narrated by Talhah Ibn ‘Ubaydullāh: ‘Umar Ibn Khattāb said that the
Prophet said: ‘If you will sell gold for silver then there is a danger of
interest in it. [Likewise, if you will sell] wheat for wheat, barley for barley
and dates for dates, the result would be no different; except that the exchange
be spot.’ (ibid., p. 208)
-- Ribā Al-Fadl in the Trading of Dates:
i.b. Narrated Ibn ‘Abbās: The Prophet came to Madīnah and the people used to
pay in advance the price of dates to be delivered within two or three years. He
said [to them]: ‘Whoever pays in advance the price of a thing to be delivered
later should pay it for a specified measure at specified weight for a specified
period.’ (Bukhārī op. cit., h. 2086)
ii.b. Narrated Abū Sa‘īd Al-Khudrī and Abū Hurayrah: Allah’s Apostle employed
someone as a governor at Khaybar. When the man came to Madīnah, he brought with
him dates called Janib. The Prophet asked him: ‘Are all the dates of Khaybar of
this kind?’ The man replied: ‘(No), we exchange two Sā‘ of bad dates for one Sā‘
of this kind of dates (i.e. Janib), or exchange three Sā‘ for two’. On that, the
Prophet said: ‘Don’t do so, but sell the dates of inferior quality for money,
and then buy Janib with the money’. The Prophet said the same thing about dates
sold by weight. (Muslim op. cit., p. 215)
iii.b. Narrated Abū Sa‘īd Al-Khudrī: Once Bilāl brought Barni (i.e. a kind of
dates) to the Prophet and the Prophet asked him: ‘From where have you brought
these?’ Bilāl replied: ‘I had some inferior type of dates and exchanged two Sā‘
of it for one Sā‘ of Barni dates in order to give it to the Prophet to eat.’
Thereupon the Prophet said: ‘Beware! Beware! This is definitely Ribā! This is
definitely Ribā! Don’t do so, but if you want to buy [ superior kind of dates]
sell the inferior dates for money and then buy the superior kind of dates with
that money.’ (ibid.)
iv.b. Narrated Zaid bin Thābit: The Prophet permitted selling the dates of
the ‘Araya for ready dates by estimating the amount of the former (as they are
still on the trees). (Bukhārī op. cit., h. 2044)
4. Consequences of accepting Ribā al-Fadl?
The following are some of the implications of Ribā al-Fadl in the
contemporary commercial dealings that have been imagined by some Muslim writers:
i) There should be a ban on
money-changers trading the same currency (dollar for dollar for instance) on
unequal terms.
ii) Goldsmiths should be required to
exchange old jewelry for the new on the basis of weight (after separating the
precious stones) without applying a cut for any impurity in gold or making a
claim for their manufacturing costs.
iii) Indirect means should be adopted to
exchange goods belonging to the same category but having different qualities. (IIIE’s
Blueprint 1999, p. 41)
5. Rational Justifications and Reasons for their Unacceptability
There are numerous explanations attempted by scholars to offer rational
justifications for the proscription of Ribā al-Fadl. This section mentions only
a few of them, with each mention followed by my comments.
Hardie and Rabooy have suggested that the injunction on Ribā al-Fadl had the
effect of discouraging barter, unless it could fulfill very specific
requirements, and encourage people to use cash transactions in business deals’ (Hardie
and Rabooy, op. cit., p.58). Indeed if the Ahādīth on Ribā al-Fadl are accepted
the way many of them appear in the books of the Hadīth literature, then no
barter trade can ever be undertaken by Muslims since the only barter that seems
to have been allowed in these Ahādīth is the exchange of similar goods on spot.
Muslims have, however, never considered barter trade illegitimate. Moreover, the
‘very specific requirements’ suggested in the explanation have not been
clarified by the authors any further. The only type of barter that seems to be
legitimate on the basis of these Ahādīth would require the commodities to be
identical in all respects, which is a condition that can fulfill no business
requirements at all.
Another explanation presented is this: ‘Debasing of currency was widely
practiced; to protect ignorant people from deception and fraud [therefore,] it
was necessary to establish certain measures to introduce well defined criteria’
(Kabbara 1988, 81). Without any supportive evidence, this argument cannot be
accepted as valid. The onus of proving that at the time of the Prophet (sws),
debasing of currency was actually widely practiced and that he condemned
exchange of debased coins with the genuine ones is on those who have made that
claim. Moreover, it is not just gold and silver which are mentioned in the
Ahādīth of Ribā al-Fadl; wheat, barley, dates, and salt have also been included
in the list of items prohibited in the exchange allegedly causing Ribā al-Fadl.
How do these commodities help remove the problem of debased currency?
Mawdūdī has attempted to rationalize Ribā al-Fadl differently. He has argued
that the commodities proposed to be exchanged in the Ahādith, although falling
under the same category, are those with slight variations in quality. In other
words, according to him, if one quality of gold is to be exchanged with another
of a different quality, then the Ahādīth require that the differences of quality
be ignored and the very same quantity or weight of both should be exchanged on
spot (Mawdūdī 1992, p. 174). The difficulty one finds in accepting this
explanation is that the Hadīth of the Prophet (sws) quoted above does mention
the same quality to be exchanged along with the same quantity.
Secondly, it looks even more unacceptable to imagine that a person would
knowingly commit himself to a bargain whereby he is required to give a superior
quality of his gold to another person for inferior quality gold of exactly the
same weight. It would indeed be unfair to expect the former to agree to any such
deal. Surprisingly, the same author allows the exchange of the same category of
animals in dissimilar numbers because he believes that there can be huge
variations in the quality of the same category of animals (ibid., 181-2).
According to another explanation presented to rationalize Ribā al-Fadl, it
was a significant step to elevate trade from narrow regional and national limits
to international horizons. This injunction was meant to discourage exchange of
metallic coins with face values different from their real intrinsic values in
international trade (Sioharvi 1984, p. 275). The same author, a few pages later,
reveals another reason behind the apparent injunction: to discourage people from
accumulating the commodities mentioned in the Hadīth because ‘by prohibiting
Ribā al-Fadl, situation has been created whereby people do not sell gold,
silver, and identical commodities, because exchanging a like commodity for
another identical one is a futile exercise’ (ibid., p. 280). It seems as
difficult to understand what these Ahādīth have to do with the exchange of face
value of coins with their intrinsic values as it is to appreciate how by banning
unequal spot exchange of gold and silver their accumulation could be
discouraged.
Ghazālī understood from the apparent restriction of Ribā al-Fadl yet another
purpose. According to him, since gold and silver were meant to be used as
currency in the divine scheme, their sale for each other in dissimilar
quantities was considered contrary to that purpose (Ghazālī n.d., pp. 68-9). Use
of gold and silver as currency is, however, now a thing of the past. Its use as
a currency has become extinct because the two metals are available in far less
volume than would be necessary to meet the growing needs of the world. It could
not have been an unalterable part of the Divine Scheme. Moreover, if that is the
explanation for prohibition of sale of gold for gold, silver for silver, and
gold for silver then what about the other non-metallic commodities mentioned in
the Ahādīth in whose case similar exchange has likewise been prohibited?
Ibn Qayyim, on the contrary, believes that Ribā al-Fadl has been prohibited
not for its own sake but because, if allowed, it could lead to the real Ribā
al-Nasī’ah
(Ibn Qayyim 1374 H., Vol. 2 pp. 99-100). Although this explanation seems to be
the least unacceptable of all, the trouble with accepting it is that, as
mentioned in a Hadīth quoted later, Ribā is to be found in credit transactions
alone and has nothing to do with spot exchange of commodities.
Far from helping in consolidating the prohibition of Ribā, the so-called Ribā
al-Fadl has helped in confusing the entire concept of it.
It is interesting to observe that some modern Muslim economists mention Ribā
al-Fadl but carefully omit to make any comments on it.
I heard the late Shaikh Mahmud Ahmad, an enlightened Muslim economist,
expressing his inability to appreciate the reasons behind the concept of Ribā
al-Fadl and its alleged prohibition.
Ibn Qayyim writes that many people in his days were oblivious of the real
rationale behind the prohibition of Ribā al-Fadl. So much so that some of the
scholars did openly admit that they failed to appreciate the logic behind it. (Ibn
Qayyim 1374 H., vol. 3., p. 204) Likewise, in the contemporary Muslim writings
on the subject there is a strong need expressed to do something about this
concept. The Report of the International Institute of Islamic Economics Workshop
on Islamization of the Financial System says: ‘Ribā is Ribā. The traditional
dichotomy between Ribā al-Nasī’ah and Ribā al-Fadl (sic.), in the Fiqh
literature needs reconsideration. It does not serve any new purpose, to say the
least.’ (IIIE’s Report 1999, p. 41)
6. The Correct Understanding
It is my firm opinion that Ahādīth have not attempted to define Ribā. The
Qur’ān has done that quite adequately.
Any further attempt in a relatively less reliable source of knowledge would have
been, at least, unnecessarily repetitive or, worse still, confusing because of
the danger of misreporting. Hadīth has, well within the jurisdiction given to it
by the Qur’ān,
clarified Qur’ānic teachings about Ribā by removing misunderstandings about it
and explaining its application in certain areas of business.
If the Ahādīth of Ribā al-Fadl are properly interpreted, they serve to
clarify two important aspects relevant to the prohibition of Ribā: one that Ribā
is only applicable to credit dealings and, two, that while dealing with loan
transactions, it is absolutely essential that what is returned by the borrower
should be identical to the item he borrowed, otherwise it is very likely to
cause the transaction to be Ribā-ridden.
The following presentation of Ahādīth would clarify the correct understanding
on the subject. In order to properly understand the meanings of the Ahādīth, the
translations given below arrange to insert within brackets the words that either
seem to have been implied when the Prophet (sws) made the statements or else
were missed out in the process of communication between the individuals forming
the chain of narrators during the two centuries when only the memories of the
narrators were accommodating them.
Thus the correct understanding is that the following is a more correct
presentation of Hadīth iii.a:.
‘If you give [on credit] gold, then receive back the same gold: the same weight
and the same quality; and if you give silver [on credit], then receive back the
same silver: the same weight and the same quality, because the one who gives
more or expects more, then [he should know that,] that is exactly Ribā.’
Likewise, a more correct translation of iv.a. is this: ‘If you will sell gold
for silver [on credit] then there is a danger of interest in it. [Likewise, if
you will sell] wheat for [another kind of] wheat, barley for [another kind of]
barley and dates for [another kind of] dates, the result would be no different;
[there is no way of avoiding the danger of Ribā in a barter transaction
involving the same commodity] except that the exchange be spot.’
Likewise the Prophet (sws) has also been reported to have prohibited people
from selling silver on credit to receive gold (Hadīth iva). The Prophet (sws)
categorically stated that the question of Ribā relates to exchanges involving
credit and has nothing to do with spot exchanges. He is reported to have said:
‘What is [exchanged] on spot, there is no problem [of Ribā] in that but that
which is [exchanged] on credit [and there is a variation in the value of
commodities exchanged] then that is Ribā’ (Muslim, op. cit., vol. 4, p. 211).
Likewise, the following two Ahādīth can’t be accepted unless we accept that
the question of time lag was implied in the statement. If that is not accepted
then these Ahādīth are in direct conflict with the Ahādīth i.b and iv.b.
ii.b. Narrated Abū Sa‘īd Al-Khudrī and Abū Hurayrah: Allah’s Apostle employed
someone as a governor at Khaybar. When the man came to Madīnah, he brought with
him dates called Janib. The Prophet asked him: ‘Are all the dates of Khaybar of
this kind?’ The man replied: ‘(No), we exchange two Sā‘ of bad dates for one Sā‘
of this kind of dates [on credit], or exchange three Sā‘ for two [on credit]’.
On that, the Prophet said: ‘Don’t do so, but sell the dates of inferior quality
for money, and then buy Janib with the money’. The Prophet said the same thing
about dates sold by weight.
iii.b. Narrated Abū Sa‘īd Al-Khudrī: Once Bilāl brought Barni (i.e. a kind of
dates) to the Prophet and the Prophet asked him, ‘From where have you brought
these?’ Bilāl replied, ‘I had some inferior type of dates and exchanged two Sā‘
of it for one Sā‘ of Barni dates in order to give it to the Prophet to eat.’
Thereupon the Prophet said, ‘Beware! Beware! This is definitely Ribā! This is
definitely Ribā! Don’t do so, but if you want to buy (a superior kind of dates)
sell the inferior dates for money and then buy the superior kind of dates with
that money.’
In the Hadīth i.a,
the word selling should be read as ‘selling on credit’, which is clarified in
the subsequent part of Hadīth that allows selling them ‘hand to hand and equal
in amount.’ This expression is clarifying only the unacceptability of a
commodity on credit for an inflated return.
In other words, ‘except hand in hand’ is disallowing what is not ‘hand in hand’
i.e. credit. Likewise ‘except … equal in amount’ is disallowing what doesn’t
fall into this category i.e. unequal amount.
What proceeds from this explanation is the fact that it is allowed to go for
a financial deal or a business transaction which involves any of the two
conditions mentioned, but not both. Thus it is allowed to exchange identical
commodities and therefore values on credit (the possibility of indexation in a
loan agreement)
and it is allowed to exchange unequal weights and qualities of commodities on
spot.
7. Consequences of this Understanding
i. Conceptual Clarity
The correct understanding of Ahādīth on the subject would enable the debate
on Ribā to be focused on the real issue of the prohibition of interest.
Unnecessary references to an imagined notion would give rise to distractions
which only serve to confuse. For instance, Vogel and Hayes have concluded after
mentioning the complexities of issues emerging from the concept of Ribā al-Fadl
that it ‘vetoes a naïve understanding of Ribā as simply a ban on compensation of
credit.’ (Vogel and Hayes 1998, p. 76). What has emerged as a consequence of
accepting the notion of Ribā al-Fadl is a weird, quite often incomprehensible,
set of rules of Ribā and their moral and logical justifications that normally
escape comprehension of a normal, intelligent mind.
ii. Freedom from Unnecessary Restrictions
Although the difficulties posed by the concept of Ribā al-Fadl are primarily
conceptual, the few uncalled for restrictions mentioned in Section 4 above will
become unnecessary.
iii. Prohibition of Certain Forms of Financial Arrangements
Another consequence of this understanding would be that inflated price for
credit sales (bay‘ murābahah) and cash purchases for deflated price (bay‘ sālim)
will have to be considered prohibited. The reason for this conclusion is that as
a result of the proper placement of Ahādīth that were hitherto alleged to be
proscribing the imaginary notion of Ribā al-Fadl it has become obvious that in a
loan transaction the obligation a borrower must discharge is the return of the
same value. In bay‘murābahah and bay‘ sālim the borrower (euphemistically called
the buyer in bay‘ murābahah and seller in bay‘ sālim) returns more. A vast
majority of the present-day Muslim scholars accept both as Islamically
legitimate. In fact the contemporary banking in the name of Islam (the so-called
Islamic Banking) is based on bay‘ murābahah to a great extent and on bay‘ sālim
to a lesser degree.
8. What are the Reasons of the Misunderstanding?
i. Sidelining the Qur’ān
The supporters of the concept of Ribā al-Fadl don’t accept the Qur’ān as the
unchallengeable original text whose meanings can’t be altered by any external
source.
As a result, they don’t have any problems in allowing Ahādīth to insert meanings
into the Qur’ānic text that its unbiased understanding can’t accept. The fact of
the matter is that the Qur’ān cannot be altered in any manner by an external
source.
Alterations in the Qur’ānic text allowed by Muslim scholars have taken many
forms, like restricting meanings of its message, inserting into its text what it
refuses to accept, or explaining a term used in the Qur’ān in a manner that runs
contrary to its own basic understanding. The notion of Ribā al-Fadl attempts to
alter the Qur’ān in the last way. The Prophet’s obligation was to explain the
Qur’ān. The traditional understanding of Ribā al-Fadl is not explaining it;
instead, it is adding a dimension in the scope of its meanings which has nothing
to do with the original injunction.
The correct approach in pursuing to understand the meaning of Ribā al-Fadl
should involve, as has been attempted in section 6, an explanation of the
meanings of the Ahādīth on the subject that promise consistency with the Qur’ān.
In other words, instead of allowing Ahādīth to dictate meanings to the Qur’ān,
it is the Qur’ān that should have been allowed to give meanings to Ahādīth.
ii. Elevating Hadīth to the Status of Unchallengeable Source
The reason why the simple and clear-cut guidance of the Prophet (sws) has
been so badly misunderstood is that many Muslims have tended to be too credulous
in the matter of Hadīth. Although the Ahādīth of the Prophet (sws) quoted above
make it quite obvious that the arrangement condemned is relating to credit
transactions alone, there are many other Ahādīth in the books of Hadīth
literature on the same subject which do not make that point clear.
Some Muslim writers insist on accepting each word in the Ahādīth as if they were
the very words of the Prophet (sws) instead of trying to make sense out of them
by carefully studying all the Ahādīth relating to a subject. The result is that
they find themselves in difficulty in understanding some of the concepts of
Islam properly.
The correct way of dealing with Hadīth literature is to collect all Ahādīth
on a subject together in such a way that the ones promising to be consistent
with the Qur’ān should be accepted while others not in line with it should be
explained away in some acceptable way. The following are some of the reports
that clarify that Ribā al-Fadl is unacceptable:
Ibn ‘Abbās quotes Usāmah Ibn Zayd who said that the Prophet of Allah, may
Allah’s blessings be upon him, said: ‘There is no Ribā in spot exchanges’
(Muslim op. cit., 219). He is also reported to have clarified that ‘There is no
Ribā except on credit.’ (Bukhārī op. cit., h. 2023)
Moreover, the Prophet (sws) is reported to have bought a slave for two slaves in
a spot transaction (Abū Dā’ūd 1985, p.954). It is reported that Ibn ‘Abbās, a
companion of the Prophet (sws), did not accept Ribā al-Fadl because, as he said,
the Prophet (sws) had clarified that there was no Ribā except in credit (Nasī’ah)
(Ibn Rushd 1983, p. 153). No wonder, then, that all differences of opinion among
the earlier Muslim jurists with regard to Ribā have been concerning Ribā al-Fadl
alone.
iii. Blind Acquiescence to the Views of Elders (Taqlīd)
The tendency amongst Muslim scholars of the later times to consider the views
of earlier scholars as sacred has contributed greatly in perpetuating the
concept of Ribā al-Fadl. When the right of forming opinions is reserved
exclusively for the people of the earlier generations and any inclination to
critically review their understanding is considered almost a sin, it is quite
understandable that a mistake like the incorrect understanding of Ribā al-Fadl,
once committed by the elders continues to pass on from generation to generation
unchallenged.
The present body of knowledge that has been conferred the title of Islamic
Economics accepts the views expressed by the earlier jurists, especially in
areas where they all tend to agree, as authentic beyond the scrutiny of all
critical examination. When a concept becomes sacred through Taqlīd, it hardly
matters to the people of later generations whether it runs contrary to the
Qur’ānic understanding of Ribā, or it clearly creates contradiction in the text
of Hadīth literature, or there is a strong disapproval expressed by a
knowledgeable companion of the Prophet (sws) on it.
The very fact that it has been approved by the earlier people is considered
enough reason to dispel all contesting arguments against it.
9. Conclusion
The only Ribā prohibited in Islam is the one mentioned in the Qur’ān, which
is, simply stated, interest charged by lender from the borrower, whether the
loan is taken for commercial purposes or for personal needs. The Prophet (sws)
applied the understanding of Ribā in the practical life and taught his followers
various aspects of its application.
His teachings and practices were later mentioned in books of Hadīth. Since these
Ahādīth involved chains of narrators involving four or five individuals
belonging to different generations spread over a period of more than two hundred
years, the contents of some of these reports got altered in a way that the basic
understanding of the message was affected. As a result, some Ahādīth on the
subject conflicted with the Qur’ān and other Ahādīth. Instead of finding
consistency between the Qur’ān and the Ahādīth on the one hand and different
Ahādīth on the subject on the other, many Muslim scholars insisted that all
Ahādīth that satisfied the condition of reliability established by the doctors
of Hadīth called muhaddithūn should be acknowledged as fully acceptable.
As a result, the concept of Ribā al-Fadl has come to be accepted by a vast
majority of Muslim scholars, even though it is illogical and, as a result,
apparently extremely complex when attempts are made to bring out a consistent
law of Ribā on the basis of it.
This article has proposed to either do away with or modify those aspects of
Ahādīth on the subject that threaten to be inconsistent with the Qur’ānic
concept of Ribā and read through them a message that promises to explain clearly
the Qur’ānic verses on the topic as a coherent message instead of confusing it.
The most plausible explanation that emerges as result of the above-stated
concern is that the Ahādīth on Ribā are clarifying two things: i) the Qur’ānic
prohibition of Ribā is concerned with credit exchange. ii) In case of an
arrangement of credit, when the loan period lapses, it is necessary that the
borrower should return absolutely the same value to the lender otherwise the
arrangement would be Ribā-ridden.
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