Islamic Banking and Interest: A Study of the Prohibition of Riba and Its Contemporary Interpretation

By Abdullah Saeed | Go to book overview

CHAPTER THREE

INTERPRETATION OF RIBA IN THE MODERN PERIOD

This chapter deals with the issue of riba in the modern period. Contemporary Muslim scholars have differed as to whether the riba prohibited in the Qur'ān applies to modern bank interest. These differences appear to stem from one basic issue: should the emphasis be on the rationale for the prohibition of riba, that is, injustice, or should it be on the legal form in which riba came to be formally conceptualised in Islamic law. The Modernist trend is towards the former, while the neo-Revivalists tend towards the latter view. It is important to note that what is referred to here as the neo-Revivalist interpretation is in fact the traditional interpretation with stress on the point that any interest is riba.


Modernist views on riba and interest

Modernists like Fazlur Rahman (1964), Muhammad Asad (1984), Sa'īd alNajjār (1989) and 'Abd al-Mun'im al-Namir (1989) tend to emphasise the moral aspect of the prohibition of riba, and relegate the 'legal form' of riba, as interpreted in Islamic law to a secondary position. They argue that the raison d'être for the prohibition is injustice, as formulated in the Qur'ānic statement, “lā taẓlimūna wa-lā tuẓlamūn.” (Do not commit injustice and no injustice will be committed against you). Modernists also find some support for their views in the works of early scholars, like Rāzi, Ibn Qayyim and Ibn Taymiyya. Rāzi, a commentator on the Qur'ān, in his enumeration of reasons for the prohibition of riba, said: “The fourth reason is that the lender mostly would be rich, and the borrower poor. Allowing the contract of riba involves enabling the rich to exact an extra amount from the weak poor.”1 The Ḥanbali scholar, Ibn Qayyim, also linked the prohibition to its moral aspect. Referring to the pre-Islamic riba, he says that in most cases the debtor was destitute with no choice but to defer the payment of the debt.2 It is this reason, according to the Modernists, which makes the prohibition morally sustainable in a changing socio-economic environment. According to the modern commentator on the Qur'ān, Muhammad Asad:

Roughly speaking, the opprobrium of riba (in the sense in which this
term is used in the Qur'ān and in many sayings of the Prophet) attaches to

1 Rāzi, Tafsīr, VII, p.94.

2 Ibn Qayyim, A'lam al-Muwaqqi'īn, II, pp. 157ff.

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