Notes on Riba
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2270 Whatever you spend on others (anfaqtum), or whatever you pledge as a promise, certainly, God knows it. The wrongdoers have no helpers.
2271 If you openly declare the charities (al sadaqati), then it is acceptable; but if you conceal it and give it to the poor, then that is better for you. It buries some of your wrongdoings; and God is Ever-aware of all that you do.
2272 You are not responsible for their guidance, but it is God who will guide whomever He wishes. Whatever you spend on others (tunfiqoo) out of goodness is for yourselves. Anything you spend on others (tunfiqoona) should be to seek God's presence. Whatever you spend on others (tunfiqoona) out of goodness will be returned to you, and you will not be wronged
2273 This is for the poor who face hardship in the cause of God and cannot go forth in the land. The ignorant ones think those people are rich because of their modesty. You know them by their features; they do not ask the people repeatedly. And what you spend on others (tunfiqoo) out of goodness, God is fully aware of it.
2274 Those who spend on others (yunfiqoona) from their money during the night and the daytime, secretly and openly, they will have their reward with their Lord. There is no fear over them nor will they grieve.
2275 Those who consume/eat riba, do not stand except as the one who stands under the influence of the shaytan. That is because they have said, "Trade is like riba." Indeed God has made trade lawful, yet He has forbidden riba. 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 eternally.
2276 God wipes out riba and increases (yurbee) the charities (al sadaqati). God does not like any hypocritical criminal.
2277 Those who have believed, work righteousness, uphold the commitment and give/bring forth/produce (aty) the purification (zakat) will have their rewards at their Lord, and there is no fear over them nor will they grieve.
2278 O you who have believed, observe God and give up what is left of the riba if you are believers.
2279 If you will not do this, then take notice of a war from God and His messenger. However, if you turn your ways, then you will have back your wealth/capital (amwalikum), you will not be wronged nor will you wrong.
2280 If the person is in difficult circumstances, then you shall wait until he becomes able. If you tasadaqoo, it is better for you if you knew.2281 Be mindful of a day when you will be returned to God then every person will be paid what it has earned, they will not be wronged.
2282 O you who believed, if you contract any debt (daynin) for a specified period, then you shall record it. Let a scribe of justice record it for you. No scribe should refuse to record as God has taught him. Let him record and let the person who has the right (haqq) dictate to him, and let him be conscientious of God, and let him not reduce from it anything. If the one who has the right (haqq) mentally incapable, weak or cannot dictate himself, then let his guardian dictate with justice; and bring two witnesses from amongst your men. If they are not two men, then a man and two women from whom you will accept their testimony, so that if one of them errs, then one can remind the other. The witnesses should not decline if they are called, and you should not fail to record it no matter how small or large including the time of repayment. That is more just with God and better for the testimony, and better that you do not have doubts; except if it is a trade to be done on the spot between you, then there is no blame on you if you do not record it. Have witnesses/evidence if you trade. No scribe shall be harmed nor any witness; for if you do so then it is vileness on your part. Be conscientious of God so that God teaches you; and God is aware of all things.
Chapter 3
3130 O you who have believed, do not consume riba, multiplying and re-multiplying, and reverence God that you may succeed.
3131 Be aware of the fire that has been prepared for the hypocrites.
3132 Obey God and the messenger so that you may obtain mercy.
3133 Race towards forgiveness from your Lord and a garden whose width encompasses the width of the heavens and the earth. It has been prepared for the observant.
3134 The ones who spend on others in prosperity and adversity, repress anger and pardon the people; God loves the good doers.
Chapter 4
4160 Because of the wrongdoing from those who were Jews, We made forbidden to them the good things that were lawful to them, and for their deterring many from the path of God.
4161 And for practicing riba which they were told not to do, and their consumption of the peoples money unjustly. We have prepared for the hypocrites amongst them a painful retribution.
4162 As for those among them (Jews) who are well founded in knowledge, as well as the believers, they believe in what was revealed to you, and in what was revealed before you, are upholders of the commitment and givers/producers of the purification (zakat); they are believers in God and the Last Day. We grant these a great recompense.
Chapter 30
3037 Did they not see that God grants provisions for whom He wills, and He perfectly measures/balances? In that are signs for a people who believe.3038 Therefore, give (aty” the relative his due/right (haqq”, as well as the poor and the wayfarer. That is best for those who seek God's presence, and they are the successful ones.
3039 And what you ataytum of/from riba to yarbuwa in the people's money, will not yarboo in the presence of God. But what you ataytum of purification (zakat) seeking the presence/countenance of God that will be multiplied.
3040 God is the one who created you, then provided for you, then He puts you to death and then He brings you to life. Is there any among the idols you set up that can do any of this? Be He exalted above what they set up.
3041 Corruption has appeared in the land and the sea by the hands of people for what they earned. He will make them taste some of what they have done, perhaps they will revert.
3042 Say, "Roam the earth and see how the end was for those before. Most of them had set up partners."
3043 So uphold your purpose/countenance/presence to/for the upright/straight deen, before a day comes from God that none can avert. On that day they shall be separated.
Notes
- Riba is always contrasted to charity.
- God wipes out riba and yurbee the charities.
- Riba is different from trade/business
- Those who engage in riba claim that riba is like trade/business
- You can give up what is left of the riba
- Riba can double/multiply and re-double/re-multiply
- If someone is in difficult circumstances, then one should wait until the borrower can pay, but it is even better to give it up as a charity (tusaddaqoo).
- 3038, which mentions giving relatives, poor people and wayfarers their haqq, seems to be related to 2282, where a debt is contracted and the one with the haqq is to dictate.
Possible meanings and practices that it encompasses
- Default charges
- Overdraft fees
- Interest charged past the maturity of the loan
- Interest charged to people who deserve charity instead
- Driving people into poverty by means of interest
- Interest on loans used for consumption of basic necessities as opposed to loans used for investment and business
The etymology of the word riba is interesting. It denotes increase and swelling. If a bank loans money to a business and thus has opportunity cost (they forgo investment of the money they loan), they are compensated the opportunity cost by interest. The business invests the money in order to make a profit - much more than the interest charged. Thus, there is no "swelling" or "high amount" that keeps them down and keeps them from paying back. There is "increase" and "swelling" in their investment, so they can easily pay the interest back. Surely, they are not in need of charity, as is denoted in the verses above.
Contrary to this, if a poor person borrows money, they use it for basic consumption. They do not experience any "increase" and "swelling" in their money - in fact it decreases. It is gone because it is spent, not invested. They would have to borrow more money or work and earn money to pay the loan back. This is similar to how the privately-held Jewish "Federal Reserve Bank" allegedly operates. It is said that they charge interest on the people's money. There is no way to pay back the debt/interest because the money comes from them in the first place, so if they charge interest on each loan given including the first one, it is impossible to pay it back. Thus, the people are driven further into debt. The same occurs with overdraft fees that private banks charge their customers. People that do not have enough money in their accounts in the first place are further punished and have to pay back more now. They experience "swelling" and "increase" in their debt without a means to use any money to increase/invest in order to pay back. They have to get the money elsewhere. Similar situations arise in default charges - people are pushed further and further into debt when they do not have enough money in the first place. It is debt slavery.
In other words, besides just interest charged on loans for consumption, riba could be or include the lender's response to a borrower's default rather than just interest charged to people who are not well off. This relates to the verses talking about borrowers who cannot pay, relinquishing the riba as charity, multiplying and re-multiplying, etc. Default penalties are an example of this. According to historical accounts, Arabs would, at the time of re-payment ask the borrower if they could pay the loan, and if they could not, the whole debt would be doubled.
Furthermore, riba can just generally be interest charged on loans for people who have a "haqq" and deserve "sadaqat."
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The silence on this post is deafining... I agree with your well thought out definitions and thank you for your research
Peace -
The silence on this post is deafining... I agree with your well thought out definitions and thank you for your research
PeaceThank you peace
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- I reject and disown my previous assertion that interest is permissible when used for investment.
Reason it is bad In terms of finance theory this makes sense since you are making a moderate return with little to no risk. You get paid before equity shareholders and have a fixed return without any risk, unless you forgo your claim during a default.
- I also reject the assertion that any fixed interest is permissible. Similarly I reject the notion that this is akin to renting. This has no Quranic basis.
Reason it is bad It asks for a return on currency, which is something that can not intrinsically grow in value. Value can only be added to things such as raw materials through the investment and use of labor and capital. If you build a house and charge for the service of tenancy, you are charging for something that has intrinsic value and was built through capital and labor. Every good and service has intrinsic value. Claiming that currency does is like saying that intrinsic value has intrinsic value. Example from calculus The first derivative of 2x ist 2. The second derivative is 0. Currency is 2, whereas everything else is 2x or a polynomial. This essentially is why the god says that trade (e.g. renting) is not like riba (return on lent currency).
Let us assume that the currency is USD for the first three examples and gold for the fourth
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Not riba I can take pure gold and make a ring or watch out of it by investing into or using capital and labor. Now, I sell each ring or watch for more USD than it cost me to extract/buy the raw gold and the cost of labor and capital for each ring. Currency is traded for something that has intrinsic value. In addition, I have added value to something that had less intrinsic value before.
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Not riba If I buy and sell gold, I can make a profit by buying low and selling high. This is basic trade. The amount of gold does not increase. I have merely found someone who saw more value in it then the person who sold it to me at the time. Although I have not created increased tangible value, currency is traded for something that has intrinsic value. I profited from the subjective increase in value. Intrinsic value can be subjectively different from person to person.
3.a. Riba I lend someone $100 and ask back $110. Currency is traded for currency. I have demanded a return on currency. I am asking for a an increase in the money supply without adding value to the economy. I am also making a risk-free profit.
3.b. Riba (with an extreme example) You own no USD. I own all the USD in the world and loan it to you and charge 1% interest. There is no way you can pay me back with currency.
- (Currency is gold...) Riba I lend someone 1 kg of gold and ask back 1.1kg or I lend 100 gold coins and ask back 110. The amount of gold has now increased without me adding any value or God creating more gold in the environment. I have demanded a return on currency.
Difference between renting an apartment and a mortgage with simple interest
Renting Pay fixed sum for service of using something that has intrinsic value and then returning it. You have a place in which to live and are payng for it.
Mortgage Pay fixed sum for service of using something that has no intrinsic value and then returning it. You have a place in which to live and are payng for the currency used.
Let us free ourselves from rebellious and selfish desires (shaytan)
2275 Those who consume interest do not stand except as one being influenced by the touch of the shaytan. That is because they have said "Trade is the same as usury."
Think about all the fools spending beyond their means with credit cards, USA basically forcing you to get debt due to credit scores, student loans burying fools while driving up college tuition fees, mortgages driving up home prices, and not to mention the housing market crash in 2008...
If you arent poor, dont spend beyond your means.
If you are poor, be steadfast. If you are rich, help the poor.2276 God wipes out interest and grants growth to charities. God does not like any ingrate, one who drags down potential.
Once we realize that we dont need to study in the usa, get a mortgage, etc - then we will get detached from interest. Why do something you cant afford? Why would you charge your fellow man interest for borrowing a couple bucks? - on a worthless currency!
Let us remember how serious taking interest is
2278 O you who acknowledge, be conscientious of God and give up what is left of the interest if you are those who have acknowledged.
2279 If you will not do this, then take notice of a war from God and His messenger. However, if you repent, then you will have back your principal money, you will not be wronged nor will you wrong.
2275 ...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 eternally.
Perhaps the collapse of the housing market and the bg financial crisis was a "war from God."
And if we pay interest it isnt anywhere close to being as bad as charging it, but it is not ideal
3039 And whatever you may give out in interest so that it might increase people's wealth will bring no increase in the sight of God, whereas all that you give out in purity, seeking God's countenance... For it is they, they that shall have their recompense mul?tiplied!