2-Prohibition of Usury ("Riba") in Islam

Those who devour usury will not stand except as stand one whom the Evil one, by his touch, Hath driven to madness. That is because they say: “Trade is like usury,” but God hath permitted trade and forbidden usury. Those who after receiving direction from their Lord, desist, shall be pardoned for the past; their case is for God (to judge); but those who repeat (The offence) are companions of the Fire: They will abide therein (for ever).

God will deprive usury of all blessing, but will give increase for deeds of charity: For He loveth not creatures ungrateful and wicked Those who believe, and do deeds of righteousness, and establish regular prayers and regular charity, will have their reward with their Lord: on them shall be no fear, nor shall they grieve.

O ye who believe! Fear God, and give up what remains of your demand for usury, if ye are indeed believers. If ye do it not, Take notice of war from God and His Apostle: But if ye turn back, ye shall have your capital sums: Deal not unjustly, and ye shall not be dealt with unjustly. (Surah Al Baqarah Verses 275-276, 279)

There are three (3) strong reasons why all Muslims MUST avoid usury:

1. Allah permitted trade and forbidden usury (riba);
2. Allah will deprive usury of all blessing, this applies to the receiver, the giver and the witness;
3. Allah and his Apostle (Muhammad S.A.W) declare war to receiver of usury.

The Prophet (pbuh) thus made it abundantly clear that the greatest danger to the integrity of the "ummah" and the faith ("iman") of the believers would come from riba. This was confirmed by the warning from Allah Himself which was pronounced in the choice of riba as the subject of the last revelation.


In todays' Muslim world, most Muslims pray 5 times a day, fast during the month of Ramadhan and most importantly he/she declares himself or herself as a Muslim but quite many are also still indifferent when it comes to riba. They do not take pork (taught by their parent from young age) but yet they ignore the implications of receiving and giving usury (like working in conventional banks? invest in usury investments such as conventional bank fixed deposits, stock, unit trust etc or take-up conventional loan, conventional credit card etc?). Perhaps, 25 years ago we can say that one takes usury because of "dharurat" or "darurah (necessity) since there was no Islamic banking product then but since the establishment of Bank Islam in 1983, particularly now with so many Islamic banks in Malaysia and throughout the world, "dharurat" should no longer apply. Muslims have no choice but to use Islamic banking financial services and more importantly, to avoid riba investments. Bank Negara Malaysia statistics in 2008 indicated that there was over 9.3 million credit cardholders in Malaysia but only about 500,000 of the cardholders use Islamic credit cards? Let's assume, half of current credit cardholders are Muslims, why are they still indifferent between a "halal" and a "non-halal" credit card? Let's not deliberate whether current Islamic credit card product is considered shariah compliant (some Muslim scholars still argue on the Shariah principle used for Islamic credit card...we shall examine this later) but most importantly, if they claimed to be a Muslim, they should immediately switch to Islamic credit card.

Some says" Islamic banking is more expensive than conventional borrowing!?" Even if the statement is true (I will prove this statement is wrong in later article), must one forgo "halal" Islamic banking products for a "non-halal" conventional banking products? In the Western countries where "halal food" is difficult to get, one is willing to pay premium for the "halal" food but in Malaysia (if we are to use similar reason) as a Muslim, one MUST use Islamic banking product since Allah deprive blessing to users and takers of usury. Again the writer would like to stress that the Muslims today (particularly in countries where there are Islamic banks) have no choice but to use "halal" Islamic financial products.

There is a hadith of the prophet Muhammad S.A.W (pbuh) that says, "The sin of riba (usury) is as though one is having sex with his mother or father 36 times". This hadith indicates how severe is the sin of taking "riba". Worse than that, Allah and his prophet (pbuh) declared war on the receiver (including taker and witness) of riba. Please read this carefully, ALLAH DECLARED WAR TO THE RECEIVER OF RIBA.
With years of working experience in both conventional and Islamic banking system, with the help of Allah, the writer shall provide simple explanation, examples in the form of mathematical calculations, legal implications to prove that Islamic banking is relatively cheaper and less discreminating (when it comes to financing products) compared to conventional banking.




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