Lesson 74

Economy LessonsFinance (1)

Wealth

Allah prohibited usury. It is the increase of wealth by two means:

a) The first is excessive usury, selling an item for its equivalent

with difference in value.

b) The second is delayed usury which is of two types :

- one well-known which is increasing the value of debt through the debtor's

payment to compensate for his delay in payment,

- -the second is selling an item for another different item on credit .

The wisdom behind prohibition is to encourage investments, realize profits in

return for actual activities, ward off injustice, and preclude abhorrence.

Bank Interests and Saving Channels

Bank Interests and Saving Channels which are defined in advance without sharing in the profits and losses are a kind of usury.

Insurance

Insurance is possible on condition that its money will not be used in usurious

dealings.

Currency exchange is possible as a kind of sale on condition that exchange is hand to hand

without any stated term.

Debt Transfer

It is allowed to transfer the debt from one creditor to another to whom he also owes a similar debt, and merited to the latter -

if he is capable of accepting it.

Good loans

Good loans are recommended for the mature person who is capable of lending, on condition that description and value must be determined, and no benefit in

any way will be attained, or considered a kind of charity.

Agreeing on a date for payment is possible but it is preferable not to do this.

Debts

Allah, the Almighty, made it obligatory to write down the debt, or to have it

documented by two witnesses.

The same applies to all contracts and transactions that can be documented.

Agreeing on a date for payment is possible but it is preferable not to do this.

Deposits

Deposits for safekeeping are lawful between two mature parties with the

consent of the depositary party.

Its acceptance is obligatory if the depositor is in constraint, while it is recommended in any other case, unless the depositary is

unable to preserve the deposit. In that case, it would be offensive.

The depository has no right to benefit from the deposit. He is under no obligation if

the deposit was damaged without his intention or negligence.

Each party has the right to return the deposit whenever he wants.

Evidence from the Qur’an and Sunnah

Usury prohibition:

Allah says:

ب�ا ﴿ الر� ثل� م� الب�يع� ا �ن�م� إ ال�وا ق� م ب�أ�ن�ه� ذ�ل�ك�با الر� م� ر� و�ح� الب�يع� الل�ه� ل� أ�ح� ﴾و�

: [275البقرة ]

This means:

“That is because they say: "Trading is only like Riba (usury)," whereas Allah has

permitted trading and forbidden Riba (usury).”

(Al-Baqarah: 275)

Allah says:

﴿ وا ذ�ر� و� الل�ه� وا ات�ق� ن�وا آم� ال�ذ�ين� ا ي�ه*ي�أ�

ب�ا الر� م�ن� ى� اب�ق� م�ن�ين� ؤم� م* ك�نت�م ﴾إ�ن

: [278البقرة]

This means:

“You who believe! Be afraid of Allah and give up what remains (due to you) from

Riba (usury) (from now onward), if you are (really) believers.”

(Al-Baqarah: 278)

Allah says:

ا ﴿ ع�اف0 أ�ض ب�ا الر� الت�أك�ل�وا ن�وا آم� ال�ذ�ين� ا �ي*ه� أ � ياة0 اع�ف� ﴾م*ض�

: عمران] [130آل

This means:

“O you who believe! Eat not Riba (usury) doubled and multiplied.”

(Al-`Imran: 130)

The Prophet (SAWS) said, “A dirham which a man knowingly

receives in usury is more serious than thirty-six acts of fornication”.

( Reported by Ahmad)

The Prophet (SAWS) said, "Usury is (equivalent to) seventy types of sins, the simplest being that a man should

marry his mother".

(Reported by Ibn-Majah)

`Abdullah Ibn-Mas`ud (RA) narrated:“Allah’s Messenger (SAWS) cursed he who

accepts usurious interests and the one who pays it, those who record it,

and stand witness to it (are also like those who take and give

interest) ”.(Reported by at-Tirmidhiyy)

Abu-Hurayrah (RA) narrated that the Messenger of Allah (SAWS) said:

“Avoid the seven deadly things. It was said: What are they, Messenger of Allah? He

replied: Associating anything with Allah, practicing sorcery, killing one whom

Allah has declared inviolable without a just cause ,

devouring usury, devouring the property of an orphan, fleeing from the battlefield,

and accusing the pious women with adultery.”

(Reported by al-Bukhariyy and Muslim)

The Messenger of Allah (SAWS) said:“Gold is to be paid for with gold, raw and

coined, silver with silver, raw and coined (in equal weight), wheat with wheat in equal measure, barley with barley in

equal measure, dates with dates in equal measure, salt with salt in equal measure;

if anyone gives more or asks more, he has dealt in usury .

But, there is no harm in selling gold for silver and silver for gold (in unequal weight),

payment being made on the spot. Do not sell them if they are to be paid for later. There is

no harm in selling wheat for barley and barley (for wheat) (in unequal measure), payment being made on the spot. If the

payment is to be made later, then do not sell them.”

(Reported by An-Nasa’i and Abu-Dawud)

Sa`d Ibn-Abi-Waqqas (SAWS) narrated:

“The Messenger of Allah (SAWS) forbade to sell fresh dates for dry dates when

payment is made at a later date.”

(Reported by Abu-Dawud)

The Prophet (SAWS) said:“The selling of wheat for wheat is riba

(usury) except if it is handed from hand to hand and equal in amount.

Similarly, the selling of barley for barley is riba except if it is from hand to hand,

and dates for dates is usury except if it is from hand to hand ”.

(Reported by al-Bukhariyy)

He (SAWS) also said ,“Do not sell gold for gold unless equivalent in

weight, and do not sell less amount for greater amount or vice versa; and do not sell silver for silver unless equivalent in weight, and do not sell less amount for

greater amount or vice versa and do not sell gold or silver that is not present at the

moment of exchange for gold or silver that is present.”

(Reported by al-Bukhariyy and Muslim)

Transfering the Debt:

The Messenger of Allah (SAWS) said:

“A rich person’s procrastination in paying back his due debts without a legal reason is an act of oppression. And if any of you is referred to a rich person (for settling a

debt), he should agree to such substitution ”.

(Reported by Muslim)

Good loans:

Allah says:

ن0ا ﴿ س� ح� ضا0 ر ق� الل�ه� ر�ض� ي�ق ال�ذ�ي ذ�ا م�نك�ر�يم> ر> أ�ج ل�ه� و� ل�ه� ه� اع�ف� ي�ض�      ﴾ف�

: [11الحديد]

This means:

“Who is he that will lend to Allah a goodly loan, then (Allah) will increase it manifold to his credit (in repaying), and he will have (besides) a good reward (i.e. Paradise).”

(Al-Hadid: 11)

The Prophet (SAWS) said:

“He who brings his brother out of a discomfort, Allah will bring him out of

the discomforts on the Day of Resurrection.”

(Reported by al-Bukhariyy and Muslim)

 Debt documentation: Allah says:

اكت�ب�وه� ﴿ ف� م?ى م*س� ل@ أ�ج� إ�ل�ى ب�د�ين@ ت�د�اي�نت�م �ذ�ا إ ن�وا آم� ال�ذ�ين� ا �ي*ه� أ ي�اه� ع�ل�م� ا ك�م� ي�كت�ب� أ�ن ك�ات�ب> ي�أب� و�ال� ب�الع�دل� ك�ات�ب> ب�ين�ك�م لي�كت�ب و�

� و�ال ب�ه� ر� الل�ه� ولي�ت�ق� ق* الح� ع�ل�يه� ال�ذ�ي ل�ل� لي�م و� لي�كت�ب ف� الل�ه� 0 ع�يفا ض� و

أ� ا يه0 ف� س� ق* الح� ع�ل�يه� ال�ذ�ي ك�ان� إ�ن ف� يئ0ا ش� نه� م� ي�بخ�سد�وا ه� ت�ش و�اس ب�الع�دل� ل�ي*ه� و� ل�ل لي�م ف� و� ه� ي�م�ل� أ�ن ت�ط�يع� ي�س ال� و

أ��ت�ان� أ ر� ام و� ل> ج� ر� ف� ل�ين� ج� ر� ي�ك�ون�ا ل�م إ�ن ف� ال�ك�م ج� ر� م�ن يد�ين� ه� ش�ا م� د�اه� إ�ح ت�ذ�ك�ر� ف� ا م� د�اه� إ�ح ل� ت�ض� أ�ن د�اء� ه� الش* م�ن� ون� ض� ت�ر م�م�ن

د�ع�وا ا م� إ�ذ�ا د�اء� ه� الش* ي�أب� و�ال� ى ر� ت�كت�ب�وه� األ�خ أ�ن م�واأ� ت�س و�ال�

م� و� وأ�ق الل�ه� ند� ع� ط� أ�قس� ذ�ل�ك�م ل�ه� أ�ج� �ل�ى� إ 0 ك�ب�يرا وأ� 0 غ�يرا ص�

ة0 ر� اض� ح� ة0 ار� ت�ج� ت�ك�ون� أ�ن إ�ال� ت�اب�وا ت�ر ال�أ� أ�دن�ى و� اد�ة� ه� ل�لش�

�ذ�ا إ د�وا ه� أ�ش و� ا ت�كت�ب�وه� أ�ال� ن�اح> ج� ع�ل�يك�م ل�يس� ف� ب�ين�ك�م ا ون�ه� ت�د�ير�وق> ف�س� إ�ن�ه� ف� ع�ل�وا ت�ف إ�ن و� يد> ه� ش� و�ال� ك�ات�ب> ار� ي�ض� و�ال� ت�ب�اي�عت�م

ع�ل�يم> ء@ ي ش� ب�ك�ل� الل�ه� و� الل�ه� ك�م� ي�ع�ل�م� و� الل�ه� وا ات�ق� و�   ﴾ب�ك�م : [282البقرة]

This means: “You who believe! When you contract a debt

for a fixed period, write it down. Let a scribe write it down in justice between you. Let not the scribe refuse to write as Allah has taught him, so let him write. Let him

(the debtor) who incurs the liability dictate, and he must fear Allah, his Lord, and

diminish not anything of what he owes. But if the debtor is of poor understanding, or weak, or is unable to dictate for himself,

then let his guardian dictate in justice.

And get two witnesses out of your own men. And if there are not two men (available), then a man

and two women, such as you agree for witnesses, so that if one of them (two women)

errs, the other can remind her. And the witnesses should not refuse when they are called (for evidence). you should not become weary to write it (your contract), whether it be small or big, for its fixed term, that is more just with

Allah; more solid as evidence, and more convenient to prevent doubts among yourselves,

save when it is a present trade which you carry out in the spot among yourselves, then there is no sin on you if you do not write it down. But take

witnesses whenever you make a commercial contract. Let neither scribe nor witness suffer any harm, but if you do (such harm), it would

be wickedness in you. So be afraid of Allah; and Allah teaches you. And Allah is the All-Knower

of each and everything.” (Al-Baqarah: 282)

Allah says:

إ�ل�ى ﴿ ان�ات� األ�م� ت�ؤ�د*وا أ�ن ك�م ر� م�ي�أ الل�ه� إ�ن�

� ل�ها ﴾أ�ه : [58النساء]

This means:

“Verily! Allah commands that you should render back the trusts to those, to whom

they are due.”

(An-Nisa’: 58)

Allah says:

ان�ت�ه� ﴿ م�أ� ت�م�ن� اؤ ال�ذ�ى د� لي�ؤ� ﴾ف�

: [283البقرة]

This means:

“Let the one who is entrusted discharge his trust (faithfully).”

(Al-Baqarah: 283)

The Messenger of Allah (SAWS) said:

“Pay the deposit to him who deposited it with you, and do not betray him who

betrays you.”

(Reported by at-Tirmidhiyy)