What is Riba?

[tlihawa]

Salamun alaykum,
I would like to share my opinion regarding riba in Quran. Let me start by collecting all related verses and meaning of the riba,

ر ب و  = Ra-Ba-Waw = it increased/augmented, the practicing/taking of usury, excess/addition, an addition obtained more than what is supposed to be received, become high/grown up/large/swollen/risen, mount up, to grow/swell, out of breath, panting. rabiyatun - ever-increasing, severe. arba (comp. form) - more numerous, more increased.

=Riba vs Trade=

2:275   Those who consume RIBA do not rise except as one being influenced by the touch of the devil. That is because they have said: "Trade is the same as RIBA." While God has made trade permissible, and He has made RIBA forbidden. Whoever has received understanding from his Lord and ceases, then he will be forgiven for what was before this and his case will be with God. But whoever returns, then they are the people of the Fire, in it they will abide.

Trading is not Riba. So how do we distinguish RIBA from trade?

4:161   And for their taking of RIBA, while they were prohibited from doing so, and for their consuming the money of the people unjustly. We have prepared for the disbelievers among them a painful retribution.

Riba is one example of consuming other people's money unjustly. Let see how to avoid that,

4:29   O you who believe, do not consume your money between you unjustly, unless it is through a trade which is mutually agreed by you. And do not kill yourselves; God is Merciful towards you.

So the trade which is mutually agreed by both party is not RIBA. This is the difference between RIBA and trade. Even if we apply interest on a money loan for profit, as long as it is agreed upon by both parties, then it is a trade.

The meaning of RIBA should not be able to cancel God's provisions in trade, which is mutual agreement by both parties in normal condition.

So what is RIBA then?

=RIBA vs Sadaqati=

After comparing it with trade, this time in the following verse, RIBA is compared to Sadaqah (charity),

2:276   God condemns RIBA, and He grants growth to the SADAQATI <charities>. And God does not love any wicked sinner.

From here we can see the direction of this understanding of RIBA, explained in the following verses,

2:278   O you who believe, be aware of God and give up what is left from RIBA, if you truly are believers.

2:279   And if you will not do this, then be informed of a war from God and His messenger; but if you repent, then you will have back your principal money, you will not be wronged nor will you wrong.

2:280   If the debtor in difficulty, then you shall wait until he becomes able. And if you relinquish it as a charity <tasaddaqu> it is better for you if only you knew.

So Riba as opposed to Sadaqati <charities>, this applies when there is a trade failure, or in a loan, where the borrower is having financial difficulties to repay the loan with reasonable reasons.

What the creditor must do is debt restructuring, giving the debtor the opportunity to be financially able to repay the debt. This is one thing we often see in the financial world,

"Debt restructuring is a process that allows a private or public company or a sovereign entity facing cash flow problems and financial distress to reduce and renegotiate its delinquent debts to improve or restore liquidity so that it can continue its operations."


and if there is no possibility to pay back, then the debt can be cleared, as sadaqaty or charity

"Debt relief or debt cancellation is the partial or total forgiveness of debt,"

By looking at the above understanding, I understand that RIBA or the addition is not a problem as long as both parties agree to it, and the borrower is able to return it.

It will only become something that is prohibited when the debtor is experiencing financial difficulties naturally and is unable to repay. The creditor may only collect the principal of the debt, and even then by restructuring the debt.

This is also clarified by the following verse,

3:130  yāayyuhā alladhīna āmanū lā takulūl-riba aḍʿāfan muḍāʿafatan wa-ittaqūl-laha laʿallakum tuf'liḥūna

3:130  O you who believe, do not consume RIBA, FROM THE WEAK/INFIRM, INCAPACITATED ; and reverence God that you may succeed.

= Dad-Ayn-Fa = to be weak/feeble/infirm. To think repute, esteem, treat or hold a person weak. To exceed, twofold, manyfold, double, triple, multiple words. Like, an equal portion or as much again.

Furthermore, we can see the context of the Dad-Ayn-Fa in here,

A person who is unable to pay his debts.

So this RIBA only applies to certain situations, where additions/interest are allowed when the borrower has the ability to pay, and must be abolished or rescheduled when the borrower is in financial difficulty and unable to pay back. Interest loan is fine for me, as long as mutually agreed by both parties, and in the normal condition.

Peace

[jkhan]

Salamun alaykum,
I would like to share my opinion regarding riba in Quran. Let me start by collecting all related verses and meaning of the riba,

ر ب و  = Ra-Ba-Waw = it increased/augmented, the practicing/taking of usury, excess/addition, an addition obtained more than what is supposed to be received, become high/grown up/large/swollen/risen, mount up, to grow/swell, out of breath, panting. rabiyatun - ever-increasing, severe. arba (comp. form) - more numerous, more increased.

=Riba vs Trade=

2:275   Those who consume RIBA do not rise except as one being influenced by the touch of the devil. That is because they have said: "Trade is the same as RIBA." While God has made trade permissible, and He has made RIBA forbidden. Whoever has received understanding from his Lord and ceases, then he will be forgiven for what was before this and his case will be with God. But whoever returns, then they are the people of the Fire, in it they will abide.

Trading is not Riba. So how do we distinguish RIBA from trade?

4:161   And for their taking of RIBA, while they were prohibited from doing so, and for their consuming the money of the people unjustly. We have prepared for the disbelievers among them a painful retribution.

Riba is one example of consuming other people's money unjustly. Let see how to avoid that,

4:29   O you who believe, do not consume your money between you unjustly, unless it is through a trade which is mutually agreed by you. And do not kill yourselves; God is Merciful towards you.

So the trade which is mutually agreed by both party is not RIBA. This is the difference between RIBA and trade. Even if we apply interest on a money loan for profit, as long as it is agreed upon by both parties, then it is a trade.

The meaning of RIBA should not be able to cancel God's provisions in trade, which is mutual agreement by both parties in normal condition.

So what is RIBA then?

=RIBA vs Sadaqati=

After comparing it with trade, this time in the following verse, RIBA is compared to Sadaqah (charity),

2:276   God condemns RIBA, and He grants growth to the SADAQATI <charities>. And God does not love any wicked sinner.

From here we can see the direction of this understanding of RIBA, explained in the following verses,

2:278   O you who believe, be aware of God and give up what is left from RIBA, if you truly are believers.

2:279   And if you will not do this, then be informed of a war from God and His messenger; but if you repent, then you will have back your principal money, you will not be wronged nor will you wrong.

2:280   If the debtor in difficulty, then you shall wait until he becomes able. And if you relinquish it as a charity <tasaddaqu> it is better for you if only you knew.

So Riba as opposed to Sadaqati <charities>, this applies when there is a trade failure, or in a loan, where the borrower is having financial difficulties to repay the loan with reasonable reasons.

What the creditor must do is debt restructuring, giving the debtor the opportunity to be financially able to repay the debt. This is one thing we often see in the financial world,

"Debt restructuring is a process that allows a private or public company or a sovereign entity facing cash flow problems and financial distress to reduce and renegotiate its delinquent debts to improve or restore liquidity so that it can continue its operations."


and if there is no possibility to pay back, then the debt can be cleared, as sadaqaty or charity

"Debt relief or debt cancellation is the partial or total forgiveness of debt,"

By looking at the above understanding, I understand that RIBA or the addition is not a problem as long as both parties agree to it, and the borrower is able to return it.

It will only become something that is prohibited when the debtor is experiencing financial difficulties naturally and is unable to repay. The creditor may only collect the principal of the debt, and even then by restructuring the debt.

This is also clarified by the following verse,

3:130  yāayyuhā alladhīna āmanū lā takulūl-riba aḍʿāfan muḍāʿafatan wa-ittaqūl-laha laʿallakum tuf'liḥūna

3:130  O you who believe, do not consume RIBA, FROM THE WEAK/INFIRM, INCAPACITATED ; and reverence God that you may succeed.

= Dad-Ayn-Fa = to be weak/feeble/infirm. To think repute, esteem, treat or hold a person weak. To exceed, twofold, manyfold, double, triple, multiple words. Like, an equal portion or as much again.

Furthermore, we can see the context of the Dad-Ayn-Fa in here,

A person who is unable to pay his debts.

So this RIBA only applies to certain situations, where additions/interest are allowed when the borrower has the ability to pay, and must be abolished or rescheduled when the borrower is in financial difficulty and unable to pay back. Interest loan is fine for me, as long as mutually agreed by both parties, and in the normal condition.

Peace

Peace..

Excellent brother..
that's my understanding as well..
If I put it in a nutshell.. Exploiting others unfairly financially is Riba.. Business can never be and never should exploiting others financially.. Business is just profit for the effort and the value of goods and services.. Beyond that is definitely Riba..

God bless you for sharing and explaining it crystal clearly.. I don't  see any violation of Quranic tone..
Thank you..

[Abdun Nur]

Amity,
riba means usury.

Usury is not trade, trade is a reciprocation of goods or services between two or more parties.

Usury is a one-sided extraction of the fruits of the labours of another, which has 5 basic forms:

Debt (the interest demand for the use of money)

Profit (the interest demanded for the use of capital)

Rental (the interest demanded for the use of infrastructure)

Taxation (the interest demanded for the use of your labour)

Ownership (the interest demanded for the use of land through the fiction of eminent domain)

If you'd like to educate yourself further: A True Medium of Exchange

https://earthcoinage.com/a-true-medium-of-exchange/

[Euphoric]

In Western terms, Riba is Loan Sharking.

[Abdun Nur]

Is that so Euphoric, in western terms, I see, and that is your expert and well research determination is it! Loan sharking, well I never, lucky such a great expert is here to put me right, and with such a deep and complete understanding, you should be made the worlds greatest authority on riba then, I've been wasting my time researching and studying all these years, what a fool am I, all I needed to do was get your learned opinion, Loan sharking, who would have guessed it....

[Euphoric]

Is that so Euphoric, in western terms, I see, and that is your expert and well research determination is it! Loan sharking, well I never, lucky such a great expert is here to put me right, and with such a deep and complete understanding, you should be made the worlds greatest authority on riba then, I've been wasting my time researching and studying all these years, what a fool am I, all I needed to do was get your learned opinion, Loan sharking, who would have guessed it....

You are very welcome, Alhamdulillah.

Truth is simple and straightforward. Doesn't require much research or effort. 

[Abdun Nur]

That was sarcasm Euphoric, It's sad I have to point that out, but not surprising.

[Euphoric]

That was sarcasm Euphoric, It's sad I have to point that out, but not surprising.

If that was sarcasm, then you should repent and ask Allah for forgiveness. Lying and being deceitful are sinful acts and not mannerisms of the believers.

[Abdun Nur]

I'd worry more for yourself, Euphoric, I know what rina is, you clearly are in confusion and willful ignorance, there is no war with sarcasm against the foolish, only riba.

[Audanto]

Thank you for sharing your insights on riba in the Quran. It's always great to have a deeper understanding of Islamic finance and what is permissible and what is not. I appreciate you collecting all the related verses and explaining the meaning of riba.

It's important to understand that trading is not riba and we need to distinguish between the two. I also agree that if both parties mutually agree to a trade that involves interest, then it is not considered riba. It's all about having a fair and just agreement between the parties involved.