Ihyaaud Deen An Effort to Revive Deen in Totality
It is essential for every believer to learn what is halaal and haraam in Shari’ah so that he may be able to save himself from getting involved in that which is declared as impermissible without knowing. Among the things that a believer should learn about is those business or monetary transactions which contain the element of riba.
At times, the transaction or contract may seem to be halaal, but due to some impermissible clause being included in it, it renders the entire transaction or contract impermissible. As a result, the profits which accrue from such a transaction are ruled as riba (interest).
Hazrat Umar (radhiyallahu ‘anhu) was so particular in this regard that he addressed the people saying, “No person should trade in our market besides those who have learnt (the masaa’il of) deen.” (Sunan Tirmizi #487)
The reason for Hazrat Umar (radhiyallahu ‘anhu) preventing people from selling merchandise in the market until they had learnt the relevant masaa’il of commerce and trade was to stop people from carrying out riba transactions, thereby causing their earnings as well as the earnings of others to become haraam.
In the Mubaarak Hadith, Rasulullah (sallallahu ‘alaihi wasallam) had foretold the coming of such crucial times in the ummah where people will not be concerned regarding whether their earnings are through halaal or haraam sources. Rasulullah (sallallahu ‘alaihi wasallam) said, “A time will dawn upon the people (before Qiyaamah) where a man will not be concerned as to what wealth he acquires – whether it is from halaal or haraam (sources).” (Saheeh Bukhaari #2059)
What is the Definition of Riba?
In Shari’ah, riba refers to any excess that is paid by one party to another in a monetary transaction over and above the exchange that is due, and the excess is conditional in the transaction.
For example, if A gives a loan of R10 to B and he adds the condition that when B is repaying the loan, he must repay R11, then in this case, the extra R1 that is paid over and above the loan amount is ruled as riba and haraam.
In the example above, though the riba amount may seem to be very small, as it is only R1, however it is so destructive that it will cause damage to one’s entire deen. Rasulullah (sallallahu ‘alaihi wasallam) said, “Whoever purchases clothing for ten dirhams, but one of the dirhams spent to purchase the clothing was earned from haraam, Allah Ta‘ala will not accept any salaah of such a person while he is wearing this clothing (even though he will be absolved of the responsibility of the salaah).”
After narrating this Hadith, Hazrat Abdullah bin Umar (radhiyallahu ‘anhuma) said, “May I become deaf if I did not hear this Hadith from Rasulullah (sallallahu ‘alaihi wasallam) (i.e. I had most certainly heard this hadith from Rasulullah (sallallahu ‘alaihi wasallam) and If I am lying, then may I become deaf).” (Majma’uz Zawaa’id #18105)
Riba in a Business Transaction
In a business transaction, if any party makes the condition that they will only do the deal if the other party gives them a gift or benefit over and above the exchange that is due in the transaction, then this extra gift or benefit will be regarded as riba.
For example, A tells B, “I will sell my car to you for R100 000, on the condition that you allow me to stay in your beach cottage for one week.” Such a transaction will be regarded as a faasid (invalid) transaction, and the extra benefit that A takes of staying in the beach cottage will be regarded as haraam and riba (interest).
It should be borne in mind that in this example, though only one person is receiving the extra benefit of the cottage, but since the entire transaction is tainted with riba, both parties will be sinful, and the barakah of the entire sale will be lost for both parties.
Another example of a similar nature are the benefits and perks which the bank gives to their depositors in the form of points, lounge access, discounts on certain purchases made from stores or airlines etc. Just as the riba which the bank gives in cash is haraam, these conditional benefits and perks are also haraam.
Riba through Late Payments
Just as riba takes place through putting a condition of receiving an extra benefit in the transaction, it also takes place through putting the condition that if one delays in settling the debt on its due date, then a fee will be charged for late payment.
For example, A does not pay the school fees and is charged a penalty for late payment. Similarly, on account of one delaying in settling his monthly instalments to his creditor, the creditor charges him a penalty. This penalty is regarded as riba in Shari’ah. It is definitely not right for the debtor to delay in paying the school fees or settling his monthly instalments; however, this does not justify the creditor breaking the law of Shari’ah and charging him riba which Allah Ta‘ala had declared as haraam.
The Fuqahaa explain that any profit accrued through any invalid business or monetary transaction will fall under the law of riba. The law regarding the profits of such a transaction is that it will have to be given in charity to the poor without the intention of receiving any reward.
Refraining from Taking Any Additional Benefit from the Debtor
Even if one does not put a condition that the debtor should give him some additional gift or benefit over and above the exchange, but one uses this debt to extract additional gifts, favours and benefits from the debtor, then these additional gifts, favours and benefits will amount to riba. In this regard, the Hadith mentions: “Every loan through which one draws benefit (from the debtor over and above the loaned amount), then this will be regarded as riba.” (Sunanul Kubra #10933)
In another Hadith, Rasulullah (sallallahu ‘alaihi wasallam) said, “If you have given a loan to some person and he (the debtor) wishes to give you a gift, or wishes to offer you a lift on his conveyance (because of the loan you gave him), then do not accept his gift or his lift, except if the exchanging of gifts and giving lifts was a common practice between the both of you prior to you giving him the loan” (Sunan Ibnu Maajah #2432)
Due to the emphasis of Rasulullah (sallallahu ‘alaihi wasallam) of not accepting any benefit from the debtor, the Sahaabah (radhiyallahu ‘anhum) exercised extreme caution in dealing with their debtors. Hazrat Abu Burdah (radhiyallahu ‘anhu) relates, “When I came to Madinah Munawwarah, I met Hazrat Abdullah bin Salaam (radhiyallahu ‘anhu). He said to me, ‘You are living in a country (Syria) where dealing in interest is common. Therefore, if anyone who owes you money gives you a load of straw, wheat or grain as a gift (because of the loan you had given him) then do not accept his gift, for certainly it is interest.’” (Saheeh Bukhaari #3814)
From the above we understand the serious consequences of getting involved in riba transaction. Therefore, before a person enters into a monetary or business transaction, he should refer to the rightly guided Ulama to find out whether the transaction or business contract is permissible or not.
