Riba Revisited (Part 2 of 10)
Riba has many names such as:
Riba Al-Jahiliyya: The Riba known before the Revelations,
Riba Al-Quran: The Riba mentioned in The Quran,
Riba Al-Qard, or Al-Qurood: The Riba of Loans,
Riba Al-Dayn or Al-Duyoon: The Riba of Debts,
Riba Al-Nasee’a: The Riba of Delay,
Al-Riba Al-Jaliyy: The Clear Riba,
Al-Riba Al-Kamil: The Complete Riba,
There is also another name given to Riba, it is Al-Ramaa’, which comes from Hadith, where one version is: “Do not take a Dirham with Two Dirhams, I fear for you Al-Ramaa’ (Riba).”
The other Riba, otherwise known as the Riba of Al-Buyou’ (Sales) also has a few names, the main one being Riba Al-Sunnah, and Riba Al-Hadith, as it was prohibited by Hadith. It also has the names Riba Al-Fadl (Increase) when two items are exchanged immediately but in unequal amounts, and the name Riba Al-Nasaa’ (Delay) when two items are exchanged equally but with a delay of one. But perhaps its most important name as given by IBN AL-QAYYIM (died c. 1350 A.D.) was The Invisible Riba.
There are other names, somewhat less frequently mentioned in the books. For example there is Riba Al-Yad (Riba of the Hand), and this is where two items that should be exchanged immediately in a sale, are delayed without stipulation, meaning one of the parties to the transaction leaves the location of the contract (Majlis Al-Aqd) without any mention of any delay in delivery.
There is also Riba Al-Ajlan, which is where two items that should be exchanged equally have a difference in them such as Gold and Silver. This was mentioned by AL-SARAKHSI (died c. 1090 A.D.) in Al-Mabsut based on a saying by Umar Bin Al-Khattab (RAA): “Do not sell a Dirham for Two Dirhams, that is Riba Al-Ajlan.”
Also mentioned by some Hanafi and Shafe’i scholars such as AL-SARAKHSI in ‘Al-Mabsut’ and AL-MAWARDI (died c. 1058 A.D.) in ‘Al-Hawi’ is “Riba Al-Naqd”, which is similar to the above where money is exchanged for money unequally.
Another name given to some sales is Riba Al-Muzabana, based on a hadith forbidding such a sale. The Maliki School, such as AL-MANOUFI (died c. 1532) in ‘Kifayat Al-Talib’. This is where items from the same family are exchanged where one item is well measured such as 100 kilograms of Grapes against an estimated amount of unripened Raisins. The book gives the definition as: “Riba Al-Muzabana is: The sale of an known against an unknown, or an unknown against an unknown of its kind.”
There is also another name, one rarely used: Riba Al-Shafa’a, which is the Riba of Intercession. This is where for example one receives a gift in compensation for speaking to someone important on behalf of someone, or where one provides a loan and requests that the borrower intercedes on his behalf with someone.
The final two names are perhaps are even more rarely heard: 1) Al-Riba Al-Haqiqi (the Real Riba), which is the increase on a loan from the beginning, or when the payment is delayed, as well as the increase in an immediate exchange between two Ribawi items; and b) Al-Riba Al-Hukmi (Constructive Riba), where in a sale of two Ribawi items, one is delayed. These last two come from Dr. Nazih Hammad, Professor of Fiqh, Um Al-Qura University, Makkah; from his book ‘Mu’jam Al-Mustalahat Al-Maliyyah’, a dictionary of financial terms.
What notable scholars said about the definition of Riba
It is always very interesting to look back and see how our predecessors, and especially scholars defined Riba. One can find some surprises, so I have collected a few definitions throughout the ages.
AL-SARAKHSI (died c. 1090 A.D.) in ‘Al-Mabsut’: “The increase that is devoid of stipulated compensation in a sale.”
IBN AL-ARABI (died c. 1148 A.D.) in ‘Ahkam Al-Quran’: “Every increase without an opposing compensation.”
IBN AL-ATHEER (died c. 1209 A.D.) in ‘Al-Nihaya fi Ghareeb Al-Hadeeth’: “The increase on the principal of money without a contract of sale.”
AL-QURTUBI (died c. 1270 A.D.) in his ‘Ahkam Al-Quran’: “Most of the Forbidden Sales have an increase in either the money or the benefit to one party due to a delay.”
AL-ZAILAI’ (died c. 1340 A.D.) in ‘Tabyeen Al-Haqa’eq’: “Riba is an Increase that is devoid of Compensation.”
IBN JUZAY AL-GHARNATI (died c. 1340 A.D.) in ‘Al-Tasheel’: “Riba in language is increase, then it was used in Shariah in forbidden sales, most of which involved an increase.”
IBN RAJAB (died c. 1390 A.D.) ‘Rawae’ Al-Tafsir’: “The Riba that Allah has forbidden includes all Wealth Consumption of what Allah has forbidden in Commerce.”
IBN HAJAR (died c. 1450 A.D.) in ‘Al-Fath’: “Every Forbidden Sale is termed Riba.”
BADR AL-DEEN AL-AYNI (died c. 1451 A.D.) in ‘Umdat Al-Qare’: “An increase of money without compensation in a transaction of money against money.”
IBN NUJAIM (died c. 1560 A.D.) in ‘Al-Bahr Al-Ra’eq’: “Every Forbidden or Corrupted Sale is Riba.”
IBN ABIDIN (died c. 1836 A.D.) in ‘Radd Al-Muhtar’: “Every Corrupted Contract is Riba.”
AL-SHAWKANI (died c. 1834 A.D.) in ‘Nayl Al-Awtar’: “The name Riba is given to every forbidden sale.”
Riba of Sales
What were the reasons for which the Riba of Sales (Al-Buyou) was forbidden? If the main Riba was the only Riba mentioned in The Quran, why was a different type of Riba forbidden?
AL-JASSAS (died c. 981 A.D.) states in his Ahkam that: “The Arabs did not know that selling Gold for Gold and Silver for Silver with Delay was Riba.”
Here of course he’s referring to the fact that in Al-Jahiliyya, only the main Riba mentioned in The Quran was known.
The best answer really comes from IBN AL-QAYYIM (died c. 1350 A.D.) from his famous work ‘A’alam Al-Muwaqqi’in’ in which he explains:
“Riba is of two kinds, Clear (Jaliyy), and Invisible (Khafiyy). The Clear Riba was forbidden because of its great harm, and the Invisible Riba was forbidden because it is a means to the Clear Riba. The prohibition of the first is as a purpose, and the prohibition of the second is as a means.”
The Riba of Sales is also of two kinds: a) Riba Al-Fadl which takes place when certain items such as foods and metals are exchanged with each other immediately but in different amounts, and b) Riba Al-Nasaa’ which takes place where these same items are exchanged with each other in equal amounts but with one being delayed.
He goes on to explain:
“They have been forbidden to engage in Riba Al-Fadl (Increase) for fear of arriving at Riba Al-Nasaa’, because if they sold one Dirham for two, they would slowly move to a delay in the exchange resulting in Riba Al-Nasee’a. (Delay and Increase)”
“They were forbidden Riba Al-Nasaa (Delay), which if permitted would result in “Delay further and Increase the amount.” This is where the item to be delivered is delayed and then agreement takes place to increase.
Effectively then, IBN AL-QAYYIM is stating that there is only one type of Riba, and the second Riba is prohibited because it could degenerate into the main Riba if unchecked.
Riba Reputation in Al-Jahiliyya
Whilst Riba was practiced during Al-Jahiliyya freely, that is before the prohibition, it did not have a good reputation even then.
We know from stories that it was held in disrepute. For example in ‘Seerat Ibn Hisham’, a famous book of the life of the prophet (PBUH) by IBN HISHAM (died c. 830 A.D.), we read a story related to the reconstruction of the Kaaba in Al-Jahiliyya and at which time funds were needed for the building:
“O Quraish, do not enter into its (Kaaba) construction from your gains except that which is good, No prostitution money, No Riba sale, and no money from injustice to people.”
This story was also written in IBN KATHIR’s (died c. 1373 A.D.) ‘Al-Bidaya wa Al-Nihaya’.
…Continued in Part 3.