Quran Read-A-Long: The Cow 274-281, Mohammed’s Final Revelation, Forbids Usury

The subject of usury is one that comes to the fore in Judaism, Christianity, and now as I finally see, Islam. The Bible says, “If you lend money to any of My people who are poor among you, you shall not deal with them as a creditor; you shall not exact interest from them” (Exodus 22:25). It is this verse, in large part, which makes usury so repulsive to Christianity (well, not now but back in the day). Christians were forbidden to lend money at interest to one another. Jews were also forbidden, according to this verse, from lending money at interest to one another – but not to Christians. Why? Because the verse specifies “My people,” which for Jews means only other Jews. Thus, Jews can lend with interest to Christians.

Indeed, this is where the Christian stereotype of the greedy, money-grubbing Jew came from. There was a need in 10th century Christian society for money-lenders because Christians couldn’t do it themselves, and Jews were forbidden from doing pretty much everything else (couldn’t be part of guilds and do crafts, couldn’t own land and farm, etc. – hence, money-lending and middle-men traders). Thus, Jews became money-lenders in the Christian world. Today, neither Christians nor Jews seem to have such a problem with what we just call now, banking.

The questions that these verses bring up for me pertain to the nature of banking in modern-day Islam. With usury forbidden, how does banking work in theocratic Islamic countries, like say, Saudi Arabia. Is it forbidden? Is it considered a necessary evil? How do many modern Muslims in general reconcile this verse with what seems to have become the modern capitalist norm (not that all Muslims are modern capitalists but for those who subscribe)? I don’t expect anyone to be able to answer these questions for everyone else, but just generally to share how s/he deals with this. I find that Christians and Jews simply ignore it at this point.

I’d like to add a note by Asad about verse 281: that according to the uncontested evidence of Ibn’ Abbas this verse was the last revelation granted to the Prophet, who died shortly afterward.

Is there anything else you can tell us about these verses?

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The Cow 274-281

274. Those who spend their possessions [for the sake of God] by night and by day, secretly and openly, shall have their reward with their Sustainer; and no fear need they have, and neither shall they grieve. 275. THOSE who gorge themselves on usury behave but as he might behave whom Satan has confounded with his touch; for they say, “Buying and selling is but a kind of usury” – the while God has made buying and selling lawful and usury unlawful. Hence, whoever becomes aware of his Sustainer’s admonition, and thereupon desists [from usury], may keep his past gains, and it will be for God to judge him; but as for those who return to it -they are destined for the fire, therein to abide! 276. God deprives usurious gains of all blessing, whereas He blesses charitable deeds with manifold increase. And God does not love anyone who is stubbornly ingrate and persists in sinful ways. 277. Verily, those who have attained to faith and do good works, and are constant in prayer, and dispense charity – they shall have their reward with their Sustainer, and no fear need they have, and neither shall they grieve. 278. O yo who have attained to faith! Remain conscious of God and give up all outstanding gains from usury, if you are [truly] believers;  279. for if you do it not, then know that you are at war with God and His Apostle. But if you repent, then you shall be entitled to [the return of] your principal: you will do no wrong, and neither will you be wronged. 280. If, however, [the debtor] is in straitened circumstances, [grant him] a delay until a time of ease; and it would be for your own good – if you but knew it – to remit [the debt entirely] by way of charity. 281. And be conscious of the Day on which you shall be brought back unto God, whereupon every human being shall be repaid in full for what he has earned, and none shall be wronged.

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10 Responses

  1. Yesterday I was on an airplane reading a biography of the Prophet entitled Mohammed by Karen Armstrong. It is a very balanced, respectful, thorough and well-written book about one of history’s most fascinating and important people.

    At the end of the flight, the man next to me asked, “So, did you learn anything good about The Prophet.”

    “Yes,” I replied, smiling.

    “Didn’t know there was anything good about him,” the man then said.

    “There’s plenty wonderful about him,” I answered simply, turning around to finish collecting my things and exiting.

    I was incredibly curious about this man, as unnecessary as his remarks were, because throughout the flight he was reading two books. The first was the Bible, from which I noticed him reading out of the books of Samuel (Old Testament) and Luke (New Testament). Curiously, he was also reading a biography of Judah Benjamin, a nineteenth century American Jew.

    This man was obviously interested in a religion other than his own (my assumption is that he was Christian because few Jews read Luke or carry around the OT and NT), and presumably educated, but why did he feel the need to be so closed-minded about Mohammed and Islam? Why not read a biography for himself before making a comment like that?

  2. This is a complicated but interesting subject—for more you can check out “Islamic banking”
    Trade–Both Prophet Muhammed(pbuh) and his wife Khadija were bussinesspeople. —and most Meccans would have relied on trade for their economy. Banking/finance is essential for trade—in terms of credit, transfer of monies, …etc. The Quran is not against the making of profit. —Today, when a person buys a house—their house could be held by the bank until the full amount plus interest is paid—if it cannot be paid—the bank can take the property and sell it. –this can potentially create a win-lose scenario where the lender gains and the borrower loses. On the other hand, a more equitable scenario (win-win) would be if the lender and borrower shared the risk/profit. The lender and borrower would buy the “shares” in the property/house. The borrower would pay back the lender over a fixed period of time inclusive of the agreed upon profit for the lender. In case the house needs to be sold before it is fully paid—the proceeds from the sale would be divided according to the share ownership of borrower and lender. In bussiness, one could use models such as venture capitalism, profit-sharing, …etc. This enables excess monies to circulate in society and it creates a vested interest in the lender to ensure the success of the bussiness they invest in—which can in turn be mutually beneficial.
    What exactly is riba? —it is commonly defined as interest or excessive interest (usury). –but maybe one could also broadly define its principle as –the practice of taking undue advantage— ?
    Modern banking—it could be considered a “necessary evil” only because other options are not easily available—but the situation may change—many (non-Islamic) countries are considering Islamic banking—but since this requires banking/finance laws to be changed—it may still take a while for implementation.

  3. “Didn’t know there was anything good about him,” the man then said.

    Such comment really amazes me, not because it’s offensive, but simply because it doesn’t take into account how the legacy of Islam has been a spiritual guide for generations and generations of people for the past 14 centuries. All those people couldn’t have been so gullible into intentionally be followers of an “evil” person, would they?

    Anyway, great series Jay, please keep on writing! 🙂

  4. With usury forbidden, how does banking work in theocratic Islamic countries, like say, Saudi Arabia. Is it forbidden? Is it considered a necessary evil?

    No, of course not. 🙂 According to Jeremy Harding’s article, The Money That Prays, only Iran uses a system fully based on Islamic principles. All other Muslim countries have either a conventional banking system or both conventional and Islamic banking. Actually, the real issue that has most people’s heads spinning (especially Islamophobes) is how many non-Muslim countries have Islamic banking systems? The answer: a lot! For example, theoretically, any country that has HSBC branches. Both London and Singapore have been trying to move aggressively into Islamic finance/banking, with the US and France not too far behind.

    The topic of Islamic finance/banking is not too difficult to understand at the basic level, but can be quite complex as one gets into the details. Whole books have been written on the subject (one of which, a textbook available here in S’pore, runs for a couple hundred dollars). There’re even two certificate courses in the subject one can take here. (Amazingly, I’ve yet to take either.) I’ve written a number of posts on my blog about Islamic finance/banking (extracts from various magazine and news articles). You can find those posts here.

    How do many modern Muslims in general reconcile this verse with what seems to have become the modern capitalist norm (not that all Muslims are modern capitalists but for those who subscribe)?

    Actually, I’m going to quote the Harding article because it answers this question fairly succinctly:

    Before the surge of Islamic banking, many devout Muslims shied away from banks: for the poorly educated, everything, even a non-interest-bearing current account, came under the general heading haram – ‘impermissible’. Banks dealt with interest, therefore Muslims shouldn’t deal with banks. Mufti Barkatulla told me he’d had to mediate in several cases where police raids had turned up large sums of money stashed in people’s homes. Sometimes, he remembered, people were holding £30,000 or more. To the police, this was deeply suspicious; in fact people were hoarding their way out of riba. One of the changes that sharia-compliant banking is bringing in Britain, Barkatulla believes, is that working-class Muslims, older ones especially, are at last shifting ‘from a cash-based to a cashless society’, as Muslim professionals and businessmen did years ago.

    If Muslims can’t take part in a conventional economy without breaking the rules, at least they can compromise by keeping track of their infringements and ‘purifying’ the balance by charitable giving equivalent to the amounts in question. These self-administered transfusions are payable over and above the mandatory deduction, known as zakat, that devout Muslims must make and donate to charity in the space of a year.

    I’d like to add a note by Asad about verse 281: that according to the uncontested evidence of Ibn’ Abbas this verse was the last revelation granted to the Prophet, who died shortly afterward.

    That should probably be “last full verse revealed.” This sentence, “This day have I perfected your religion for you, completed My favor upon you, and have chosen for you Islam as your religion,” located in 5:3, is generally considered to be the very last revelation for the Qur’an.

    Kay wrote: What exactly is riba? —it is commonly defined as interest or excessive interest (usury). –but maybe one could also broadly define its principle as –the practice of taking undue advantage— ?

    This is one of the trickier questions in Islamic finance. As Harding pointed out in his article, some people think that riba is usury in the modern sense of the word, an excessively high interest rate. However, my belief is that interest of any amount is riba. Consider the following ahadith:

    Narrated Abu Salih Az-Zaiyat:

    I heard Abu Said Al-Khudri saying, “The selling of a Dinar for a Dinar [gold], and a Dirham for a Dirham [silver] (is permissible).” I said to him, “Ibn ‘Abbas does not say the same.” Abu Said replied, “I asked Ibn ‘Abbas whether he had heard it from the Prophet s or seen it in the Holy Book. Ibn ‘Abbas replied, “I do not claim that, and you know Allah’s Apostle better than I, but Usama informed me that the Prophet had said, ‘There is no Riba (in money exchange) except when it is not done from hand to hand (i.e. when there is delay in payment).’ ” (Bukhari: 3.34.386)

    Abu Salih reported: I heard Abu Sa’id al-Khudri (Allah be pleased with him) said: Dinar (gold) for gold and dirham for dirham can be (exchanged) with equal for equal; but he who gives more or demands more in fact deals in interest. I sald to him: Ibn ‘Abbas (Allah be pleased with them) says otherwise, whereupon he said: I met Ibn ‘Abbas (Allah be pleased with them) and said: Do you see what you say; have you heard it from Allah’s Messenger (may peace be upon him), or found it in the Book of Allah, the Glorious and Majestic? He said: I did not hear it from Allah’s Messenger (may peace be upon him). and I did not find it in the Book of Allah (Glorious and Majestic), but Usama b. Zaid narrated it to me that Allah’s Apostle (may peace be upon him) said: There can be an element of interest in credit. (Muslim: 10.3876)

    Ubaidullah b. Abu Yazid heard Ibn ‘Abbas (Allah be pleased with them) as saying: Usama b. Zaid reported Allah’s Apostle (may peace be upon him) as saying: There can be an element of interest in credit (when the payment is not equal). (Muslim: 10.3877)

    Ibn ‘Abbas; (Allah be pleased with them) reported on the authority of Usama b. Zaid Allah’s Messenger (may peace be upon him) as having said this: There is no element of interest when the money or commodity is exchanged hand to hand. (Muslim: 10.3878) [In other words, what is known as a spot transaction.]

    So, for me, even one cent above the amount of principal is riba. I do agree with Kay’s proposed definition: the practice of taking undue advantage. What I find interesting is that riba applies even to material goods. Consider:

    Abd Sa’id reported: Bilal (Allah be pleased with him) came with fine quality of dates. Allah’s Messenger (may peace be upon him) said to him: From where (you have brought them)? Bilal said: We had inferior quality of dates and I exchanged two sa‘s (of inferior quality) with one sa (of fine quality) as food for Allah’s Apostle (may peace be upon him), whereupon Allah’s Messenger (may peace be upon him) said: Woe! it is in fact usury; therefore, don’t do that. But when you intend to buy dates (of superior quality), sell (the inferior quality) in a separate bargain and then buy (the superior quality). And in the hadith transmitted by Ibn Sahl there is no mention of” whereupon”. (Muslim: 10.3871)

    In other words, the excess quantity of dates traded (the inferior quality dates) was riba; presumably an equal trade of inferior for superior dates would have been marginally halal, but a perfectly halal transaction is two sided, the sale of the inferior dates for cash first, the purchase of the superior dates for cash second.

  5. Let me rewrite that last paragraph. 🙂

    The excess quantity of dates traded (the inferior quality dates) was riba and therefore haram; even an equal trade of inferior for superior dates would be haram as the quality of the two sets of dates would not have been equal. Thus, a halal transaction is two sided, the sale of the inferior dates for cash first, the purchase of the superior dates for cash second.

  6. This is a fascinating subject and I had no idea how in depth it led (re: numerous links/references you’ve all provided). I mean, I should have known – what subject isn’t covered thoroughly in the Quran, the Hadith or Islam generally? After all, we’re talking about more than a religion but a society, a way of life and living – and surely that must include extensive guidance on economics, especially considering, as Kay reminded us, both the Mohammed and his wife were business-people, and indeed, their entire tribe, the Quryash, were in the business of business (trade).

  7. […] is Riba? This post is primarily based upon a comment I wrote over at Jay Solomon’s blog, The Zen of South Park:This is one of the trickier questions in Islamic finance. As Jeffrey Harding pointed out in his […]

  8. This is a fascinating subject and I had no idea how in depth it led…

    Yeah, I suspected that when I read the following: “I don’t expect anyone to be able to answer these questions for everyone else…” 🙂 And I was thinking, “Jay, Jay, Jay, don’t you know Kay and I well enough by now, after all these comments?” 😉 Islamic finance is a very deep topic, of which I’ve only scratched the surface. Two of the interesting things about Islamic financing, banking and business practices is that, one, the whole concept of halal and haram applies here as well, except in terms of which practices and behaviors are acceptable or not, and two, that there’s a lot more to Islamic financing and banking than just the lack of interest rates. A lot of non-Muslims get hung up on just the interest-free aspect of Islamic financing, but as my links and Kay’s comment point out, there’s a lot more meat to this subject.

    As you pointed out, Islam is indeed more than just a religion; it truly is a way of life. The problem for many non-Muslims is that Islam is a way of life. Too many people are scared of that idea, of the commitment it involves, of the jihad in maintaining that lifestyle. And, of course, egos all too often get in the way.

  9. JD has brought up a number of interesting points which I am itching to expand upon—but as he said–it is a subject with a lot of depth…….so to summarize…….
    —In general—the Quran is concerned with balance–and in particular that this balance reflect equality and justice to those who are not in a postion of strength. In bussiness/finance this is best safegaurded when transactions have transparency.—thus in the case of the inferior/superior dates that JD mentioned—money/cash is used as a mechanism of establishing transparent value. (comming up next in the verses about commercial contracts)
    —Trade and the financial tools that facilitate trade go hand in hand— It is not the concept of banking/finance itself but the METHOD used —which today relys on the presumption of interest/debt-based economic/trade models
    —Success should not be measured by the accumulation of wealth—but how one discharges one’s responsibilities—wealth is a blessing that comes with responsibility —to one’s family, those in need, and to society.
    Transparency, Justice, Equality, and Responsibilty–might sum up the basic building blocks of an Islamic economic model —or one could use the more general term—an ethical economic system. JD is right–our focus on “interest-free” misses the whole point of Islamic/ethical economics.

  10. Great topic! I’m learning a lot with you all and hope to learn much more. It’s good to see people who know your religion like you.

    One interesting point that I didn’t see mentioned above is that riba is haram with muslims and with non-muslims. I don’t know the rule in Christianity. Is riba permissible with non christians?

    Thanks!

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