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The aim of this article is to examine the concept of riba in Islam. It will explore the key aspects of this concept as explained by contemporary writers on Islamic law and shall note how they differ on the very definition of riba. Hence the purpose of this review is not just to shed light on the details of the riba prohibition but also to observe how modern authors differ in their approach to this concept. The Quranic prohibition, its ambit and the reasons for this ban are all studied by referring to the writings of various authors and the dichotomy between eastern, with particular focus on the sub-continent, and western views on these issues is explored.

Despite many writings and much research on the subject, the concept of riba remains an ambiguous and somewhat controversial area of Islamic law. As this article attempts to show, while this is primarily due to the fact that the concept was not expounded upon in the Quran in detail, an interesting factor for this ambiguity also lies in the premise that the various authors writing on this subject tend to have differing views influenced by a particular moral, religious and even geographical perspective.

Due to linguistic limitations, this research concentrates on texts in the English language. This approach will also avoid any pitfalls that may lie in the interpretation and analysis of translated texts. The focus of this review will primarily be on loan transactions though reference to riba in sales will be made where appropriate. ¹The researcher will examine the definition of riba as well as its history before, as well as after, the advent in Islam followed by the reasons for its prohibition in society. The nature of certain controversies that surround this concept will also be analysed. While it would be impossible to touch upon every ambiguity or cite the opinion of all who write on this vast subject, a review of this topic will not only reveal the intricacies of this concept but it will also become apparent why the implementation of an interest-free Islamic financial system is not without theoretical difficulties as the sources of the prohibition in Islam are far from clear and may be open to interpretation. Any attempt in the successful implementation of an interest-free Islamic financial system will only be possible once the basic elements of the theory of riba are fully understood and agreed upon.

‘Riba’ is an Arabic word that can be translated as growth, increase, augmentation, addition or expansion. This is the general linguistic meaning of the word which is not limited to the act of lending money. However as El-Ashkar notes, “when used in the Quran, the word is defined by the article ‘al’ meaning ‘the’ which is in particular reference to the act of giving money at a fixed increase.” ² Hence, in Islam it “refers to the additional amount which a lender recovers from a borrower according to a fixed rate over and above the principal amount.”³

While this definition provides a useful starting point when trying to understand the true nature of this concept, it would be misleading to admit that the exact ambit of the ban on riba is free from complexities. While most writers would not disagree with the above definition of riba or even with the subject matter of core prohibition itself, they would undoubtedly object at any attempt to demarcate fixed boundaries around this concept. By way of illustration, the researcher has examined the different definitions of riba coined by scholars of Islamic law. An effort has been made to include a wide range of perspectives; not only have well-known western authorities such as Vogel ⁴ been cited but the diverse views of leading Asian authors such as Rahman⁵ and Maududi⁶ have also been given prominence.

Saleh observes that the term riba is generally interpreted in English as ‘usury’ or ‘interest’ but explains that it has a much broader meaning in Islamic law which can be translated as ‘increase’ or ‘gain.’ He defines riba as “an unlawful gain derived from the quantitative inequality of the counter values in any transactions purporting to effect the exchange of two or more species which belong to the same genus and are governed by the same effect cause.”⁷ While this definition may be a comprehensive one, incorporating elements of both riba al-fadl as well as riba al-nasiah,⁸ it is a daunting introduction to a complex concept. Indeed, Saleh himself seems aware of this as he goes on to adopt a much simpler definition which is simply “an unlawful advantage by way of excess or deferment.” ⁹

Fazlur Rahman submits at the outset that an attempt to translate the word riba into any language is not only “futile” ¹⁰but also “a source of much confused thinking on the subject.” ¹¹He explains by example: riba is usually translated into Urdu by the word ‘sud’ which is of Persian origin and means ‘profit.’ In fact ‘sud’ is not synonymous with the Quranic term riba but rather with the Arabic word ribh. The literal meaning of the word riba as illustrated by the Quranic usage can be many things. For instance, it may be interpreted as ‘to grow’,¹²‘to increase or prosper,’¹³‘to rise’¹⁴, ‘to swell’¹⁵, ‘to nurture’¹⁶ or as ‘an augmentation or increase in power.’¹⁷ In further evidence of his argument, Rahman refers to the writings of Al Jassas,¹⁸ a respected jurist from the fourth century of hijra, who also commented on the difficulty of a literal translation as “in the shariah this word [riba] is used in a sense other than the one for which it was originally made.”¹⁹

Vogel does not attempt to define riba at all but instead is content to observe that the Quran “vehemently”²⁰ condemns it. He explains that the Quran provides very little explanation of the actual term except by contrasting it as the opposite of charity. He submits that the only kind of transaction that definitely falls under the head of riba was the pre-Islamic practice in Arabia, of extending the time period in favour of the debtor, in return for an increase in the principal amount. This is “one certain instance of what the Quran prohibits.”²¹ Maududi’s views are in agreement with the assessment that the prohibition in the Quran refers to the kind of loans given in the pre-Islamic period. He asserts that this is the reason why the Quran does not elaborate the concept in any detail. However, unlike Vogel, he is clearly of the opinion that interest falls under the head of riba for he states that “the Holy Quran uses the word riba to denote interest.”²²

Nyazee also adopts a more direct approach. He writes emphatically that “riba (usury), call it bank interest if you like, is prohibited by the texts of the Quran and the Sunnah.”²³ Like many authors from the subcontinent, he wastes little time on the ambiguities of the concept. He writes that “in the technical terminology of the law used by Muslim jurists, it is the excess stipulated in one of the two counter values in a transaction of exchange. There is complete agreement among Muslims, all over the world that this excess called riba is prohibited by the texts of the Quran as well as those of the Sunnah.”²⁴ Nonetheless, after this assured start he is forced to qualify himself and acknowledge that “a similar agreement, however, is not found when it comes to the identification of transactions in which riba can occur, that is the question as to where and when riba occurs is not very clearly answered.”²⁵ Afzal–ur–Rahman seems more cautious for he observes “that a careful study of riba will show that it is not the same as usury but it is inclusive of all excesses over and above the principal sum lent including usury.”²⁶ He goes on to identify certain elements that are an essential part of a riba transaction: a surplus over and above the loan capital, a determination of this surplus in relation to time and the bargain to be conditional on the payment of the pre-determined surplus.

These are a few examples of how writers on Islamic law deal with the problem of defining riba. It is plain that most scholars struggle to invent a comprehensive definition that successfully incorporates all aspects of this notion. The difficulty seems to lie in the fact that the fundamentals of this concept have not been clarified in Islam. Indeed even Caliph Omar is known to have bemoaned this fact: “the last verse was the verse of riba and then the messenger of God was taken. He had not explained it to us. So leave riba and doubt.”²⁷ Another difficulty is perhaps that riba is a much wider concept in Islam than perceived at first glance and so cannot be translated accurately into a word or a simple phrase in any language. It is for this reason that words such as ‘interest’ or ‘usury’ seem so inadequate. They only define one aspect of this theory.

Certain authors seem more cautious than others when faced with this predicament. While some, like Saleh, attempt to give a comprehensive definition, others, such as Vogel, are careful not to make the attempt. Writers from the subcontinent on the other hand, tend to focus on the prohibition only in so far as it relates to loan transactions, at least where the definition of riba is concerned. Perhaps this is not surprising in light of the fact that even the Supreme Court of Pakistan concentrated on this aspect of the prohibition in its historic judgement on riba.²⁸ Some writers are also content to make sweeping statements that pronounce resolutely that all kinds of interest fall under the head of riba without touching upon the controversial nature of this claim.

This contrast between the two approaches to the very definition of riba is an interesting phenomenon, aspects of which shall be referred to throughout this article. However, there are no clearly defined margins, as ultimately it is each individual author’s own belief and standing on this issue that colours his/her interpretation. Rahman summed up the situation correctly when he stated that the “eminent lexicographers and prominent commentators of the Quran if they do agree on anything at all, it is that they shall differ and each one of them shall give a definition of his own."²⁹

The exact status of riba before the dawn of Islam is difficult to ascertain as many contemporary writers do not mention this topic in much detail. Most accounts tend to be vague and confined merely to illustrative examples. For instance, Siddiqui insists that even before the advent of Islam, the practice of riba was already condemned as an evil. He cites as an early example, the famous Greek philosopher Aristotle³⁰ who labelled money as “sterile”³¹ and compared it to a “barren hen which lays no eggs.”³² A similar reference is made to the teachings of Plato ³³ as well. It was thought by these scholars that the purpose of money was to serve only as a medium of exchange and any increase in its value due to an exchange was unjust. ³⁴ Saleh writes that compound interest was forbidden as early as 1750 B.C by the Code of Hammurabi and that King Bocchoris of the 24th Egyptian Dynasty ³⁵ forbade the charging of money in excess of the principal amount. He also mentions the Athenian reformer Solon, ³⁶ who put an end to civil strife in Athens by terminating all existing debt and securities as the penalty for a failure to pay interest at the time, was for the debtor to become the lender’s slave.

In contrast to the prohibition of interest, the history of banking practices is well charted. It is clear that banking activities appeared with the first traces of organised agriculture and trade. Archaeological excavations have proved that the Sumerians³⁷ carried on various kinds of banking activities which were begun by their scared temples.³⁸ The Greeks and the Romans too, carried out banking practices similar to the Babylonians;³⁹ a civilization that emerged from the “rubble of that of the Sumerians.” ⁴⁰

There is also a mention of a prohibition on interest in other religions.⁴¹ The most quoted reference is from the New Testament: “love ye your enemies, and do good, lend, expecting nothing in return.” ⁴² It is also emphasised that in Judaism as well, the charging of interest, at least to people of the same faith, is forbidden: “if you lend money to any of my people who is poor, you shall not exact interest from him.” ⁴³

This is the general approach to this topic but the actual arguments in support of these claims are inadequately explored. For example, when discussing the Jewish faith and its version of the prohibition, the discussion is almost always incomplete in terms of the extent this prohibition applies to adherents of other faiths. A detailed analysis of the prohibition itself and a questioning of words ‘who is poor’ is also non-existent. There also seem to be inconsistencies or, at the very least, confusion between the different accounts which make it difficult to gain a coherent understanding of this area. Referring to examples quoted above, while Siddiqui stresses that the charging of interest is condemned in the Christian faith, Saleh seems less convinced that the prohibition is so clear. Although he too cites the above verse from the New Testament, he writes that the Gospels do not contain any condemnation of the charging of interest at the market rate: “on the contrary, the parable of the talents told by Christ seems to consider interest generated by deposits in banks not only a normal practice, but even a commendable one.”⁴⁴ Similarly while both Warde and Siddiqui recount that in medieval Europe, the Third Lateran Council ⁴⁵ excommunicated usurers, Warde writes that the Church had legitimized interest on secured loans by the year 1515,⁴⁶ while Siddiqui traces a ban that extends to 1830.⁴⁷

Hence the researcher has found that many present day authors on the subject of Islamic finance do not tend to extensively review pre-Islamic economic history. Indeed some do not touch upon the subject at all.⁴⁸Yet the most striking point that has emerged from the review above is that although it seems that Islam is not unique in condemning interest as an evil, it is only among Muslims that this topic has any contemporary relevance. Despite there being a history of cultural and religious condemnation of interest in other parts of the world, only Islamic nations seem determined to see the implementation of this ban in modern times.

Though there is not much discussion about riba and its position in pre-Islamic times, most of the authors write in detail about its introduction in Islam. The root of the prohibition appears in the Quran itself, the primary source of law and religion for Muslims. The following verses sum up the prohibition in the Quran: ⁴⁹

“That which ye lay out for increase through the property of (other) people, will have no increase with Allah: but that which ye lay out for charity seeking the countenance of Allah (will increase), it is these who will get a recompense multiplied.” (30:39)⁵⁰

“That they took usury, though they were forbidden; and that they devoured men’s substance wrongfully; we have prepared for those among them who reject faith a grievous punishment.” (4:161)

“Oh ye who believe! Devour not usury, doubled and multiplied; but fear God; that ye may (really) prosper.” (3:130)
“Fear the fire which is prepared for those who reject faith.” (3:131)
“And obey God and the apostle; that ye may obtain mercy.” (3:132)

“Those who devour usury will not stand except as stands 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 cause is for God (to judge); but those who repeat (the offence) are companions of the fire: they abide therein (forever).” (2:275)
“God will deprive usury of all blessing, but will give increase for deeds of charity: for he loveth not creatures ungrateful and wicked.”(2: 276)
“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.”(2: 277)
“Oh ye who believe! Fear God, and give up your demand for usury, if ye are indeed believers.”(2: 278)
“If ye do 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.”(2:279)
“If the debtor is in a difficulty, grant him time till it is easy for him to repay. But if ye remit it by way of charity, that is best for you if ye only knew.” (2:280)
“And fear the day when ye shall be brought back to God. Then shall every soul be paid what is earned, and none shall be dealt with unjustly.” (2:281)

The verses above were revealed over a period of years. During the Meccan period, there was merely a strong recommendation against the practice of interest. Outright condemnation came after the Prophet’s exile to Medina. The verses from Sura Rum are of an advisory nature and do not prescribe any punishment.⁵¹ In fact the first reference to riba in the Quran is indirect. It is simply condemned and presented as the opposite of charity. Classical jurists also do not believe that the first sura actually forbids riba but rather that it recommends the ceasing of selfish acts. ⁵²

The second revelation refers to actions of the Jewish people in Arabia who were practising riba despite the prohibition in their religion, though scholarly opinion is divided as to its true significance. On one hand, it is asserted that the focus of this revelation is on the general impropriety of taking the property of others. On the other hand, it is believed that since the form of riba that was practised by the Jews was similar to the riba of pre-Islamic times and given that the rulings for Jews and Muslims are similar, this is the actual practice that is being condemned or prohibited. ⁵³

The third verse refers to the punishment for the offence of riba. Usury is explicitly forbidden and prosperity is promised to those who obey the prohibition.⁵⁴ It is this verse that has introduced the quandary as to meaning of the phrase ‘doubled and redoubled’ or according to some translations ‘doubled and multiplied’ into Islamic jurisprudence. Doubt arises as to whether this phrase is limited only to the original amount lent or if it refers to the sum of the original property and the increase stipulated in a transaction. A further question arises whether this is the only kind of interest that is prohibited in the Quran although interpreters generally agree that this was a simply a description of the existing state of affairs in Arabia rather than a condition of the prohibition itself. ⁵⁵ Finally, controversy centres on the issue as to whether this prohibition has been addressed only to polytheists and not to believers.⁵⁶

The fourth revelation in the Quran makes it clear that the prohibition on riba extends to Muslims. It amounts to a general condemnation of riba. It is decreed that while the principal amount may be kept, any increase or gain must be returned and the debtor be treated with leniency. These verses also emphasize the difference between trade and riba in Islam. It is due to the fact that the term ‘sale’ is similar to ‘trade,’ that writers on this subject often stress the benefits of a sale transaction, contrasting it with riba which is unlawful.⁵⁷ However as Tamer notes, in the Quran the more obvious contrast is between riba and charity.⁵⁸ Nomani also agrees “that besides dissension over the intended significance about the terms such as ‘devouring’, jurists differ on the exact meaning of the ruling about sale and riba.”⁵⁹

The condemnation of riba in Islam is not confined to the Quran but is also found in the ahadith or the sayings of the Prophet Mohammed. Traditions comprise of what Mohammed said or did during his life. They are not God’s words as in the Quran rather an account of the Prophet’s sayings and descriptions of his practice. They comprise the second most important source of law and religion for the Muslims. Writers on Islamic law generally quote a number of sayings on this topic. Below are a few examples:

“The Prophet said: On the night of ascension I came upon people, whose stomachs were like houses, with snakes visible from the outside. I asked Gabriel who they were. He replied they were people who had received riba.”(Abu Hurayrah) ⁶⁰

“The Prophet has cursed one who charges riba, he who gives it, one who records it and the two witnesses; he said, “They are all equal.”(Jabir) ⁶¹

“The Prophet said: There will certainly be a time for mankind when everyone will take riba and if he does not do so, its dust will reach him.”(Abu Hurayrah) ⁶²

Riba in the traditions of the Prophet can be classified into three categories. The first comprise of the most accepted or reliable sayings of the Prophet on riba and concern the exsistence of riba when certain articles of the same kind are either bartered or exchanged unequally. The second category refers to riba in deferment of delivery or payment while the third category concerns the Prophet’s last sermon. It is believed that the riba referred to in this sermon, was the pre-Islamic practice of lending money at an increase and thus only the recovery of the original amount is allowed while any excess is forbidden. Aside from these three categories, other traditions on the subject are not unanimous and so not relied upon by Islamic jurists. For instance, with reference to loans, the traditions are contradictory on the possibility of a reduction in the amount of debt if the loan is voluntarily paid before it is due.⁶³

Thus although little doubt exists that riba is condemned in Islam, as the traditions of the Prophet and the verses from the Quran quoted above show, the exact ambit of the prohibition and the types of transactions included are not clearly mentioned in religious texts.⁶⁴ In light of this, perhaps the discrepancies noted in the writings of modern scholars are not surprising, as the sources of the ban itself seem far from lucid. While the reasons for this ambiguity are explored below in more detail, a possible reason why the primary sources are not more precise can be glimpsed from Shaihata’s explanation. He submits that it is apparent from the words of the Quran that riba is definitely prohibited, charity is strongly recommended and trade is not only permitted but even encouraged. He explains that “except by making this clear differentiation and the explicit reference in one verse to a specific form of riba where the lender accepts delay in payment against doubling the principle once or more times, the Quran does not further define al riba or its form, leaving this matter to be developed according to the exigencies of the future.”⁶⁵

While the term riba can be defined as “any excess compensation without due consideration,”⁶⁶ there are two types of arrangements that are commonly thought to come within the ambit of this definition:

Riba Al-Nasiah: This can be defined as the amount, which the lender receives from the borrower over and above the principal amount. It can be regarded as the interest that the borrower pays for the use of the lender’s money. Riba Al-Nasiah is also known as Riba Al-Quran as it was mentioned specifically in the Quran. It is often referred to as Riba Al-Jahiliyah for this was the type of riba most prevalent in Arabia and considered as its most abusive form before it was prohibited by Islam. Riba Al-Nasiah can comprise of two types of interest:

• Simple interest: This is interest calculated only on the initial amount of investment.
• Compound interest: In this type of transaction, the accumulated interest of prior periods is added to the amount lent so as to increase the total amount of debt. Proponents of the liberal theory of riba, suggest that the prohibition in Islam only extends to this kind of interest, as it was commonly used in pre-Islamic times and has the greatest scope for unfairness. Supporters of this point of view often cite the following verse from the Quran: “Oh ye who believe! Devour not usury, doubled and multiplied; but fear God; that ye may (really) prosper.”⁶⁷ However, it is by no means clear that this is the only type of interest that the Quran prohibits. In other verses regarding riba in the Quran, there is no mention of a condition that the prohibition is limited to compound interest. There is no such qualification in the traditions of the Prophet as well. It clearly goes against the spirit of a ban on riba if income is earned even as simple interest for it can then be used to give more loans, allowing interest to remain part of the economic life of a nation. In effect, “the interest will keep becoming part of the principal, which is essentially compound interest.”⁶⁸

Riba Al-Fadl: This kind of riba is also known as riba of the Prophet as he prohibited its use.⁶⁹ Riba Al-Fadl can be defined as the excess “which is taken in exchange of specific homogenous commodities and encountered in their hand-to-hand purchase and sale.”⁷⁰ The famous ahadith where this exchange is forbidden by the Prophet is as follows: sell “gold for gold, silver for silver, wheat for wheat, barley for barley, dates for dates, salt for salt, like for like, equal for equal, hand to hand. If these types differ, then sell them as you wish, if it is hand to hand.”⁷¹

Several points emerge from this text. First, it is apparent that these six commodities should only be bought and sold in equal amounts and on the spot. There cannot be an unequal or a deferred sale as otherwise the transaction would fall under riba. There is a difference among the various schools of thought as to whether the above prohibition is confined to these particular commodities or if they merely serve as examples. The majority view is that the key is the illa: i.e. the essential characteristic of a good that must be present and which makes a commodity comparable to the one specifically mentioned and so within the ambit of the original prohibition. Among the four leading schools of thought in Islam, the focus of the illa differs slightly. Imam Hanifa saw two defining attributes. He observed that all of the above commodities are sold by weight or volume. Thus all commodities that are sold in this manner and are exchanged with the same good, fall under the prohibition. Imam Shafii focused on two different attributes. He thought this law applied to every commodity that serves as a medium of exchange or is edible. Imam Malik also focused on the attribute that the commodity be edible or capable of preservation. Imam Hanbal has a variety of criteria ascribed to him. The first view ascribes to him ideas similar to Imam Hanifa. The second view approves of the Shafii approach, while the third includes all of the characteristics approved by each school, namely weight, volume and whether or not it is edible. In general it has been agreed by most scholars of Islamic law that if a commodity bears the characteristics of being sold by weight and used a medium of exchange, then a deferred sale, or a sale of unequal quantities of the same good, is prohibited.

Writers of Islamic law identify a number of reasons for the prohibition of riba in Islam. However, it is apparent that for some scholars, acceptance of this prohibition is a matter of “ritual obedience:”⁷² an act of worship similar to prayer or fasting and so questioning the underlying reason for the obligation is unnecessary. For instance, Saadullah writes that “having learnt that interest is banned by the Quranic text, the rationale or the wisdom for such a ban is known to God the Almighty.”⁷³ Qureshi also points out that although the reason for the Quranic injunction may not be fully understood by scholars today “it is quite likely to become clear to us tomorrow.”⁷⁴

While this school of thought has its supporters, it does appear to be the minority’s view. Most scholars acknowledge the need to comprehend the reasons for the ban on riba.⁷⁵ It is certainly true that the implementation of an interest-free Islamic system will become easier once the goals that need to be achieved by this prohibition have been identified. This is also of importance for the later administration and adjudication of cases by officials and judges alike.

It is often argued that the reason for the prohibition on riba is the need to prevent injustice.⁷⁶ Nyazee dismisses this explanation for he claims that justice is a vague concept and may differ among people.⁷⁷ However, the idea has merit, as in Islam, money is only legitimately earned if obtained though work, exchange, gift or inheritance. Monetary loans are simply regarded as a temporary transfer of property rights and all that be claimed as repayment are equivalent property rights as any excess cannot be justified under the above categories.⁷⁸ Thus, in an Islamic value system, riba represents a prominent source of unjustified advantage. ⁷⁹

Another argument forwarded is the adverse effect of money lending on economic stability in general. It is argued that trading in money results in an expansion of credit. This in turn leads to a discrepancy between real exchanges and cash flows. As Meenai and Ansari explain: “the interest–based system of banking creates instability and has a built–in tendency towards inflation as money creation is not linked to productive services.” ⁸⁰ Chapra points to the undesirability of riba by describing the effects of interest-based activities and resultant presence of an inequitable distribution of wealth by reference to examples such as the recession felt by the ‘Asian Tiger’ ⁸¹ countries.⁸² In fact, he too grounds his theory in the idea of fairness or justice for he claims that real justice “covers all aspects of human interaction”⁸³ and in the field of economics, justice demands that resources be used in an equitable manner so as to further humanitarian goals. Saadullah concurs with the analysis above and writes that “perhaps the rationale or wisdom of banning interest is not confined to the elimination of injustice to the individual but goes further and eliminates adverse effects on the economy.”⁸⁴ This argument was given prominence in the Pakistani Supreme Court judgement of 1999 as well.⁸⁵

Vogel asserts from the start that no single reason adequately explains the rules of riba but that all the reasons together form to give the law its final shape. Among the rationale cited by Vogel is that of mathematical equivalency.⁸⁶ He explains that this reasoning emerged from the writings of Ibn Rashid,⁸⁷ a famous Maliki scholar, who thought the goal of the riba prohibition was to advance fairness of exchange which was achieved by the insistence of exact mathematical equality in exchange whenever possible. El-Gamal also agrees with this theory and writes that the “the objective to be served by the prohibition of riba – justice – is obtained by fairly compensating each party for the value of its goods as determined by the market place.”⁸⁸

Another reason linked to the previous argument is to prevent the use of money as a commodity. It is often argued that if money and essential foodstuff, which are also used as a measure of exchange at times, are to retain their value and stability, they should be “withdrawn from commerce.”⁸⁹ Nyazee rejects the argument that the purpose of the prohibition is the prevention of sharp fluctuations in price of essential food items and precious metal that have as their primary function the determination of value. He submits that this reason is limited and short sighted. It is argued that assigning exclusive functions to precious metal is outdated. Hoarding has become difficult in this era of rapid communication and even cartels cannot accomplish this on a significant scale.⁹⁰

Another explanation has its roots in Islamic jurisprudence and can be linked back to a statement by Al Jawziyya,⁹¹ a reformer within the Hanbali school of thought. Vogel writes that the rationale put forward by this scholar focused on the prevention of the exploitation of the weak. Only a needy person would, it is asserted, “pay more for a mere extension of time.”⁹² Saleh also confirms that the prohibition stems from a wish to protect the weak from exploitation.⁹³ This rationale seems to be valid today as well for it is often the case that poorer borrowers and consumers pay a higher rate of interest compared to large firms or wealthy individuals who can negotiate credit on far more advantageous terms as they are able to grant security. ⁹⁴

Perhaps the most compelling argument is that gain is only moral if accompanied by risk and as the lender is assured of a return from the start, this is not a legitimate increase. Meenai and Ansari explain that the obligation to pay a predetermined charge serves to discourage the entrepreneur and obliges him to “remunerate the provider of capital even when the former incurs losses.”⁹⁵ Vogel also writes that a possible rationale may be that in Islam “moderate risks justify excess, while too much and too little incurs a ban.”⁹⁶ By using money as a stable measure of value, the parties gain a reasonable knowledge of the market and are not exposed to a very great risk of loss nor can take advantage of a situation where they carry no risk at all. It is also thought to be unmerited for a lender who takes no risk to be compensated simply for lending the money. However this simple justification does not adequately explain why the concept of a deferred sale exists in Islam in which circumstance it is permissible to charge extra if payment is delayed. In this situation, Islam seems to accept that the seller is being compensated for the economic or opportunity cost of the money. The reason for this inconsistency may be due to the fact that when lending money, the lender is assured of a return, while in case of trading the profit is only hypothetical; it may never materialize. “To take the ‘certain’ as a compensation for the ‘uncertain’ involves some harm.”⁹⁷ A sale, on the other hand, does not involve a contract to pay an equivalent to time but rather is an agreement to sell a commodity where time is simply one factor in fixing the price. It can also be argued that lending involves ceding the benefit of the money which if kept by the creditor could have yielded some benefit to him. For instance, it could have been invested in some other project and so the ban is a negation of the value of such a benefit. The answer to this assertion is often simplistic: Saadullah, for instance, argues that it is only the economic worldly benefit that is not recognized and that the creditor will receive his reward in the Hereafter. ⁹⁸

Thus while many reasons are forwarded for the ban on riba, none of them seem “wholly satisfactory.”⁹⁹ Ultimately it seems that the best explanation for the ban and the underlying element in all the arguments is the promotion of a more equitable and just society. Indeed it is admitted by Nyazee that the “interdependence between the proscription of riba and its condemnation under threats, and between charity and its encouragement, is an evident indication that among the purposes of the prohibition of riba is the spreading of charity and qard (loan) for meeting the needs of the poor and the needy.”¹⁰⁰ It remains to be seen, however, if the ban on riba can actually achieve this objective.

It is apparent that the reasons put forward by individual authors are a reflection of their ideals and understanding of the subject. This is why so many writers are content not to question the logic behind the prohibition, while others are satisfied simply by enunciating that justice requires this, even while condemning others for their lack of inquiry. To explain by example: Ariff is critical of the economic arguments forwarded to explain the prohibition and stresses that no studies have actually proved that such economic cycles are interrelated to the presence of interest. Nonetheless, while he reproaches such reasoning, he does not put forward a better explanation himself. In fact he submits that “the bottom line is that Muslims need no proof before they reject the institution of interest: no human explanation for a divine injunction is necessary for them to accept a dictum, as they recognise the limits to human reasoning it is a matter of faith.”¹⁰¹

Perhaps it is these simple explanations that best explain this phenomenon. The distinction between the writers of the subcontinent and other scholars mentioned before is less apparent here. While there is no doubt that there are a number of writers from Pakistan for instance, who are willing to accept such a prohibition as part of their faith, this is by no means a localised phenomenon. On the contrary, possibly the most surprising conclusion of this research is that such acceptance of the riba prohibition, without questioning its need in modern society, has been seen in the writing of scholars from all corners of the globe.

Given that the focus of this research is on riba al-nasiah, it will be appropriate to examine some of the controversies that have arisen in this area over the ambit of the prohibition. Contemporary thinking on riba can be divided into three different classes: liberal, mainstream and conservative. The liberal view entails the narrowest definition of riba as it equates riba with usury which generally regarded as an excessive rate of interest that is compounded at short intervals.¹⁰² This view does not consider bank interest as riba. The mainstream view, on the other hand, holds that any contractual increase, small or large, falls under the head of riba. The conservative view abhors, in addition to usury or bank interest, all forms of economic exploitation such as profiteering and the payment of subsistence wages to labourers.

Proponents of the liberal view point to the contradictions between the faith and practice of Muslims as a starting point to their discussions. According to them, bank interest is an inevitable and necessary part of modern life that cannot be avoided. Hence a more lenient approach to this type of transaction is advocated. For instance, Ahmed writes that “all the Muslims of the world condemn it [riba] and yet almost the entire Muslim world indulges in the practice they consider to be riba the Muslims of the world are thus placed in sadly embarrassing situation.” ¹⁰³

Scholars who favour the more liberal version of the prohibition also forward other arguments to support their claim. They point to a common grammatical rule: when ‘al’ or translated into English ‘the’ comes as a prefix of a common noun, it becomes a proper noun. According to this view, as the word ‘al’ appears before the word riba in all except the first verse, the prohibition is limited to the type of riba prevalent at the time of the revelation. These loans, it is argued, were mainly for consumption purposes and at a very high rate of interest. It is submitted that commercial loans were not in use and thus are not covered by the prohibition. Liberal scholars also insist that bank interest is different from riba as it is charged mostly on productive loans and its rate is determined by supply and demand forces in the market place.

This argument was discussed in the Supreme Court Appeal of 1999 in Pakistan¹⁰⁴ as well but it is considered to be without merit by academics for several reasons. Firstly, the revelations of the Quran do not solely apply to the people of Arabia nor are they limited to a certain period of history. The essential commandments cannot be ignored simply because there have been innovations. Further the claim that commercial interest did not exist at the time of the Prophet also seems unfounded. Though there is no doubt that the sophisticated forms of interest in popular use today were not present at the time, there were loans that were taken for commercial and agricultural purposes. Usmani writes that it was the practice of the tribes of Arabia to make two trade trips every year.¹⁰⁵ El-Ashker collaborates this and explains that one was towards Syria in the winter and “another in summer to Yemen in the south.”¹⁰⁶ These trips proved to be very profitable and trading became the dominant means of livelihood. In order to finance these trips, the traders took loans from the lenders to build up stock. Hence there is evidence of borrowing for commercial use at the time. Ahmed also argues effectively that if there were such an important distinction between loans for commercial and personal purposes, then surely the Quran would have made this difference clear. The reason that this has not been done is because the Quran “aims at abolishing it [riba] as a system.”¹⁰⁷

Another argument against the claim that loans for commercial purposes are exempt from the ban relates to the Prophet’s admonitions against the institution of mukhabarah. This involves an agreement to divide the crops between the landowner and the cultivator according to a pre-agreed ratio regardless of the yield. The similarities with the riba prohibition are obvious. A ban on this practice confirms that by analogy modern loans for commercial purposes would be frowned upon as well. ¹⁰⁸

Finally proponents of a more liberal theory of riba also point to a particular verse in Sura Nisaa to support their arguments.¹⁰⁹ It is argued that the Quran has prohibited ‘wrongful devouring’ which only arises when the consent of one of the parties is absent. If, on the other hand, both parties genuinely consent, as is often the case between two business persons in a commercial deal, it cannot the called ‘wrongful devouring.’ It is submitted that this is a very weak argument for several objections spring to mind. Firstly there is no condition in Islam stating that consent makes a prohibited act legal; adultery and gambling are examples of this. A more common sense point of view may also be that a businessman with limited options may have no real alternative but to accept the lender’s terms. Gauging the degree of consent is by no means an easy task.

The mainstream view has been upheld by the Council of Islamic Ideology of Pakistan as well in the judgements of the Federal Shariat Court¹¹⁰ and the Supreme Court of Pakistan. The mainstream view is that riba encompasses both usury and interest. Intellectuals who subscribe to this interpretation attach a secondary importance to riba in barter trade and the primary focus has been on the abolition of bank interest. This view can be criticized for ignoring the realities of present-day economic life. As Pal asserts, it is likely that the “interest rate would persist in the market in one form or another even if it were officially eliminated from the economy.” ¹¹¹

The conservative view looks at the underlying reasons for the prohibition. These jurists insist that as the reason for the prohibition on riba is to prevent the exploitation of the poor, all instances where this occurs should be banned. Haque, for instance, writes that riba is not just practiced by money lenders and hoarders of commodities, but also by landlords, merchants and speculators.¹¹² According to these scholars only the conservative view can lead to a society free of injustice as promised by Islam. However this view is open to criticism as well. There is no evidence in the Quran or in the traditions of the Prophet that the prohibition was meant to extend so far. The example of the Prophet’s refusal to fix prices or to ban the hoarding of non-food items foils this view. Finally Iqbal rightly stresses that “riba as an unfair advantage becomes a subjective phenomenon that cannot be settled once and forever.”¹¹³

Though the above discussion does present a brief glance at the ideological battles that surround the prohibition of riba in Islam, two further elements will be touched upon in more detail as they are of increasing importance in the modern discourse on riba. The first has already been explained as part of the liberal view above. It revolves around interest payments by banks and the validity of such dealings. It would be a mistake to assume that the boundaries between the scholars who support its inclusion and those that do not are geographical. One of the strongest proponents of the view that bank interest should not be regarded as riba is the Pakistani scholar Fazlur Rahman. He does not put forth any legal arguments to support his views but rather stresses on the practicalities of the situation. He is convinced that interest rates perform a vital social and economic function in society by regulating and rationing the demand for credit. Though in an utopian society conceived by Islam there would be no need for such a device, he advocates that if “we are to carry on this jihad for the setting up of the Islamic Welfare Co-operation Commonwealth, it is equally necessary that we should not close our eyes to the present realities however unpalatable they may be. The abolition of interest presupposes the highest degree imaginable of co-operative spirit and therefore cannot be implemented today unless the country’s economy and production are to be left in the direst jeopardy.” ¹¹⁴

However, just as Rahman is critical of the conservative viewpoint, scholars from the other side of the divide dismiss the arguments of writers who support a more liberal interpretation of riba. For instance, Ahmed complains that the explanations put forward by liberal scholars “contain an inherent inadequacy which negates the entire structure of their propositions.”¹¹⁵ He argues that the crux of the matter lies in the manifest injustice that is perpetuated by the institution of interest by ensuring that the creditor is always assured of a return, no matter what the cost for the debtor.

The other more modern aspect of the debate focuses on whether loans should be indexed to compensate for inflation. This has proved to be a heated avenue for debate among scholars. Even among the judges of the Supreme Court of Pakistan, this particular aspect of the law has provided grounds for disagreement. ¹¹⁶ Mansoori concurs that “Muslim scholars are sharply divided regarding the validity and legitimacy of indexation of loans.”¹¹⁷ In brief, the reasoning of those who support this measure is essentially that as inflation erodes the value of money, loans should be indexed so that the lender is guaranteed a return of at least the amount which has been lent. Those opposing the use of indexation argue that the implementation of the required measures would be “impossible,”¹¹⁸ as it guarantees a level of income that may not be achievable. More pertinently there is doubt if there is a place for such a device in a truly Islamic financial system. In such a system, deposits in banks and other types of financing will not be fixed but rather linked with the profits made.

Perhaps the real cause why there are so many questions over the ambit of riba is due to a lack of clarity of the prohibition in the Quran itself. Classical jurists agree that the revelations about riba are vague and not “free of speculative content because of a difference between its linguistic and customary meaning in the pre-Islamic period on the one hand and its specification by tradition and the ambiguity of opinions of the close companions of the Prophet on the other.” ¹¹⁹ The Quran and Sunnah are the primary sources of law but these sources are not always clear. Riba was considered to be an “inchoate”¹²⁰ term that had to be particularised by the traditions of the Prophet. Indeed disagreements over the interpretation of riba go back to the early days of Islam. ¹²¹This has had practical implications for the prohibition as methodological preferences have influenced the way in which different jurists identify riba in certain contracts. It also seems to be the cause of more modern controversies over the ambit of the prohibition. Hence it is evident, from this account of the development of Islamic jurisprudence, that riba must necessarily remain a vague concept, for its interpretation and use depends much on human preference and comprehension which must necessarily differ among scholars. However, this does make the implementation of a riba-free financial system a daunting task.

¹ The focus on loan transactions is appropriate in the context of this research as the efforts to implement an Islamic financial system have mostly centred on this aspect of riba.

² El-Ashkar A A, The Islamic Business Enterprise, Croom Helm, Kent, 1987 at 38

³ Siddiqui S H, Islamic Banking: Genesis And Rationale, Evaluation And Review, Prospects And Challenges, Royal Book Company, Karachi, 1994 at 5

⁴ Director of Islamic Legal Studies Programme, Harvard University

⁵ Leading Pakistani academic and former Head of the Central Institute of Islamic Research in Pakistan

⁶ Leading authority on Islamic finance and founder of the Jamaat -e-Islami Party

⁷ Saleh N A, Unlawful Gain And Legitimate Profit In Islamic Law: Riba, Gharar And Islamic Banking, Graham and Trotman, London, 1992 at 16

⁸ Discussed below in detail

⁹ Saleh N A, Unlawful Gain And Legitimate Profit In Islamic Law: Riba, Gharar And Islamic Banking, Graham and Trotman, London, 1992, at 17

¹⁰ Rahman F, ‘Riba And Interest’ (1964) Vol. 3, No.1, Islamic Studies, 1 at 1

¹¹ Ibid.

¹² “And thou beholdest the earth barren, then when we send down water upon it, it quickens and grows.”(22:5)

¹³ “God destroys riba and makes alms prosper.”(2:276)

¹⁴ “As the likeness of a garden upon a hill.”(2:265)

¹⁵ “Then the torrent carried a swelling scum.”(13:17)

¹⁶ “Did we not raise thee amongst us a child?”(26:18)

¹⁷ “That one nation be more powerful than another nation.”(16:92)

¹⁸ (Died 973 / 370 AH)

¹⁹ Rahman F, ‘Riba And Interest’ (1964) Vol. 3, No.1, Islamic Studies, 1 at 25

²⁰ Vogel F E and Hayes S L, Islamic Law And Finance: Religion, Risk And Return, Kluwer Law International, Boston, 1998 at 72

²¹ Ibid. at 73

²² Maududi S A A, ‘Interest’ in: Ahmad K (ed.) Economic System Of Islam, Islamic Publications Ltd, Lahore, 1999 at 160

²³ Nyazee I A K, The Concept of Riba And Islamic Banking, Niazi Publishing House, Islamabad, 1995 at 1

²⁴ Ibid. at 7

²⁵ Ibid.

²⁶ Rahman A, Economic Doctrines Of Islam Vol. 3, Islamic Publications Limited, Lahore, 1982 at 70

²⁷ Vogel F E and Hayes S L, Islamic Law And Finance: Religion, Risk And Return, Kluwer Law International, Boston, 1998 at 63

²⁸ Dr. M Aslam Khaki v. Syed Muhammad Hashim PLD 2000 SC 225

²⁹ Rahman F, ‘Riba And Interest’ (1964) Vol. 3, No.1, Islamic Studies, 1, at 24

³⁰ (384-322 B.C)

³¹ Siddiqui S H, Islamic Banking: Genesis And Rationale, Evaluation And Review, Prospects And Challenges, Royal Book Company, Karachi, 1994 at 2

³² Ibid

³³ (427-347 B.C)

³⁴ Tamer S, The Islamic Financial System: A Critical Analysis And Suggestions For Improving Its Efficiency, Peter Lang, Frankfurt, 2005 at 51

³⁵ (730-715 B.C)

³⁶ (650-560 B.C)

³⁷ (2900-1800 B.C)

³⁸ Homoud S H, Islamic Banking: The Adaptation Of Banking Practice To Conform With Islamic Law, Arabia Information, London, 1985 at 17

³⁹ (1800-600 B.C)

⁴⁰ Homoud S H, Islamic Banking: The Adaptation Of Banking Practice To Conform With Islamic Law, Arabia Information, London, 1985 at 17

⁴¹ See for instance Saleh N A, Unlawful Gain And Legitimate Profit In Islamic Law: Riba, Gharar And Islamic Banking, Graham and Trotman, London, 1992 at 12

⁴² (Luke 6:34-5)

⁴³ (Exodus 22:24-25)

⁴⁴ Saleh N A, Unlawful Gain And Legitimate Profit In Islamic Law: Riba, Gharar And Islamic Banking, Graham and Trotman, London, 1992 at 12

⁴⁵ (1179 A.D )

⁴⁶ Warde I, Islamic Finance In The Global Economy, Edinburgh University Press, Edinburgh, 2000 at 65

⁴⁷ Siddiqui S H, Islamic Banking: Genesis And Rationale, Evaluation And Review, Prospects And Challenges, Royal Book Company, Karachi, 1994 at 5

⁴⁸ See for instance Vogel F E and Hayes S L, Islamic Law And Finance: Religion, Risk And Return, Kluwer Law International, Boston, 1998

⁴⁹ The Holy Quran, translated by Abdullah Yusuf Ali, Da’wah Academy, Islamabad

⁵⁰ The figures to the left of the colon denote the number of the sura and those to the right denote the number of the verse.

⁵¹ Siddiqui S H, Islamic Banking: Genesis And Rationale, Evaluation And Review, Prospects And Challenges, Royal Book Company, Karachi, 1994 at 10

⁵² Nomani F, The Interpretative Debate Of The Classical Islamic Jurist On Riba (Usury), 2002 www.sba.luc.edu (18 September 2003)

⁵³ Ibid

⁵⁴ Siddiqui S H, Islamic Banking: Genesis And Rationale, Evaluation And Review, Prospects And Challenges, Royal Book Company, Karachi, 1994 at 11

⁵⁵ Homoud S H, Islamic Banking: The Adaptation Of Banking Practice To Conform With Islamic Law, Arabia Information, London, 1985 at 69

⁵⁶ Nomani F, The Interpretative Debate Of The Classical Islamic Jurist On Riba (Usury), 2002 www.sba.luc.edu (18 September 2003)

⁵⁷ See for instance Maududi S A A, Prohibition Of Interest In Islam, Islamic Publications Ltd, Lahore, 1986 at 82

⁵⁸ Tamer S, The Islamic Financial System: A Critical Analysis And Suggestions For Improving Its Efficiency, Peter Lang, Frankfurt, 2005 at 35

⁵⁹ Nomani F, The Interpretative Debate Of The Classical Islamic Jurist On Riba (Usury), 2002 www.sba.luc.edu (18 September 2003)

⁶⁰ Siddiqui S H, Islamic Banking: Genesis And Rationale, Evaluation And Review, Prospects And Challenges, Royal Book Company, Karachi, 1994 at 14

⁶¹ Nyazee I A K, The Concept of Riba And Islamic Banking, Niazi Publishing House, Islamabad, 1995 at 130

⁶² Usmani M I A, Meezanbank’s Guide to Islamic Banking, Darul-Ishaat, Karachi, 2002 at 40

⁶³ Nomani F, The Interpretative Debate Of The Classical Islamic Jurist On Riba (Usury), 2002 www.sba.luc.edu (18 September 2003)

⁶⁴ Tamer S, The Islamic Financial System: A Critical Analysis And Suggestions For Improving Its Efficiency, Peter Lang, Frankfurt, 2005at 37

⁶⁵ Shaihata I F I, Observations On The Question Of Riba And The Challenges Facing Islamic Banking, 1998, www.sba.luc.edu (18 September 2003)

⁶⁶ Usmani M I A, Meezanbank’s Guide to Islamic Banking, Darul-Ishaat, Karachi, 2002at 45

⁶⁷ Sura Al-i-Imran (3:130)

⁶⁸ Usmani M I A, Meezanbank’s Guide to Islamic Banking, Darul-Ishaat, Karachi, 2002 at 67

⁶⁹ Tamer S, The Islamic Financial System: A Critical Analysis And Suggestions For Improving Its Efficiency, Peter Lang, Frankfurt, 2005 at 37

⁷⁰ Usmani M I A, Meezanbank’s Guide to Islamic Banking, Darul-Ishaat, Karachi, 2002 at 49

⁷¹ Vogel F E and Hayes S L, Islamic Law And Finance: Religion, Risk And Return, Kluwer Law International, Boston, 1998 at 73

⁷² Nyazee I A K, The Concept of Riba And Islamic Banking, Niazi Publishing House, Islamabad, 1995 at 104

⁷³ Saadullah R, ‘Concept Of Time In Islamic Economics’ (1994) Vol. 2 No.1, Islamic Economic Studies < http://www.globalwebpost.com> ( 23 September 2004)

⁷⁴ Qureshi A I, Islam And The Theory Of Interest, Ashraf Publications, Lahore, 1974 at 4

⁷⁵ See for instance Nyazee I A K, The Concept Of Riba And Islamic Banking, Niazi Publishing House, Islamabad, 1995 at 106

⁷⁶ See for instance Al-Omar F and Abdel-Haq M, Islamic Banking: Theory, Practice And Challenges, Zed Books Ltd, London, 1996 at 7

⁷⁷ Nyazee I A K, The Concept of Riba And Islamic Banking, Niazi Publishing House, Islamabad, 1995 at 106

⁷⁸ Mills P S and Presley J R, Islamic Finance: Theory And Practice, Macmillan Press Ltd, London, 1999 at 9

⁷⁹ Al-Omar F and Abdel-Haq M, Islamic Banking: Theory, Practice And Challenges, Zed Books Ltd, London, 1996 at 7

⁸⁰ Mennai S A and Ansari J A, Money And Banking In Pakistan, Oxford University Press, Karachi, 2004 at 215

⁸¹ The phrase refers to the economies of Hong Kong, Taiwan, Singapore, and South Korea

⁸² Chapra M U, ‘Why Islam Has Prohibited Interest?’ (2000) No.9 Review of Islamic Economics 5 at 5

⁸³ Ibid. at 7

⁸⁴ Saadullah R, ‘Concept Of Time In Islamic Economics’ (1994) Vol. 2 No.1, Islamic Economic Studies www.globalwebpost.com ( 23 September 2004)

⁸⁵ Dr. M Aslam Khaki v. Syed Muhammad Hashim PLD 2000 SC 225

⁸⁶ Vogel F E and Hayes S L, Islamic Law And Finance: Religion, Risk And Return, Kluwer Law International, Boston, 1998 at 77

⁸⁷ (Died 1198/ 595 AH)

⁸⁸ El-Gamal M A, An Economic Explication Of The Prohibition Of Riba In Classical Islamic Jurisprudence, 2001 www.ruf.rice.edu/elgamal (19 September 2003)

⁸⁹ Vogel F E and Hayes S L, Islamic Law And Finance: Religion, Risk And Return, Kluwer Law International, Boston, 1998 at 83

⁹⁰ Nyazee I A K, The Concept of Riba And Islamic Banking, Niazi Publishing House, Islamabad, 1995 at 105

⁹¹ (Died 1350/751 A H)

⁹² Vogel F E and Hayes S L, Islamic Law And Finance: Religion, Risk And Return, Kluwer Law International, Boston, 1998 at 82

⁹³ Saleh N A, Unlawful Gain And Legitimate Profit In Islamic Law: Riba, Gharar And Islamic Banking, Graham and Trotman, London, 1992, at 15

⁹⁴ Mills P S and Presley J R, Islamic Finance: Theory And Practice, Macmillan Press Ltd, London, 1999 at 11

⁹⁵ Mennai S A and Ansari J A, Money And Banking In Pakistan, Oxford University Press, Karachi, 2004 at 215

⁹⁶ Vogel F E and Hayes S L, Islamic Law And Finance: Religion, Risk And Return, Kluwer Law International, Boston, 1998 at 86

⁹⁷ Saadullah R, ‘Concept Of Time In Islamic Economics’ (1994) Vol. 2 No.1, Islamic Economic Studies www.globalwebpost.com ( 23 September 2004)

⁹⁸ Ibid

⁹⁹ Vogel F E and Hayes S L, Islamic Law And Finance: Religion, Risk And Return, Kluwer Law International, Boston, 1998 at 86

¹⁰⁰ Nyazee, I A K, The Concept Of Riba And Islamic Banking, Niazi Publishing House, Islamabad, 1995 at 108

¹⁰¹ Ariff M, ‘Islamic Banking’ (1988) Vol.2, No.2, Asian –Pacific Economic Literature 46 at 48

¹⁰² Iqbal M M, A Broader Definition Of Riba www.pide.org.pk (6 April 2006)

¹⁰³ Ahmed Q, ‘What Is Riba?’ (1995) Vol.12, No.1, Journal of Islamic Banking and Finance, 7 at 7

¹⁰⁴ M Aslam Khaki v. Syed Muhammad Hashim PLD 2000 SC 225

¹⁰⁵ Usmani M I A, Meezanbank’s Guide to Islamic Banking, Darul-Ishaat, Karachi, 2002 at 60

¹⁰⁶ Supra, note 183, at 9. Interestingly there is a discrepancy between the accounts of these two authors. El-Ashkar maintains that the trips to Yemen were in the summer while Usmani writes that they took place in the winter.

¹⁰⁷ Ahmed Z, ‘The Theory Of Riba’ (1978) Vol.17, No.3, Islamic Studies, 171 at 179

¹⁰⁸ Usmani M I A, Meezanbank’s Guide to Islamic Banking, Darul-Ishaat, Karachi, 2002 at 62

¹⁰⁹ Verse 29

¹¹⁰ Mehmood-ur-Rahman Faisal v. Secretary, Ministry of Law PLD 1992 FSC 1

¹¹¹ Pal I, ‘Pakistan And The Question Of Riba’ (1994) Vol. 30, No. 1, Middle Eastern Studies, 64 at 75

¹¹² Haque Z, ‘The Nature And Significance Of The Medieval And Modern Interpretations Of Riba’ (1993) Vol. 32, No. 4, Part 2, Pakistan Development Review, 933 at 937

¹¹³ Iqbal M M, A Broader Definition Of Riba < http://www.pide.org.pk> (6 April 2006)

¹¹⁴ Rahman F, ‘Riba And Interest’ (1964) Vol. 3, No.1, Islamic Studies, 1 at 39

¹¹⁵ Ahmed Z, ‘The Theory Of Riba’ (1978) Vol.17, No.3, Islamic Studies, 171 at 181

¹¹⁶ Dr. M Aslam Khaki v. Syed Muhammad Hashim PLD 2000 SC 225

¹¹⁷ Mansoori M T, ‘Indexation Of Loans: A Shariah Perspective’ (1998) Vol. 37, No.1, Islamic Studies, 103 at 104

¹¹⁸ Khan W M, Transition To A Riba Free Economy, International Institute of Islamic Thought and Islamic Research Institute, Islamabad, 2002 at 104

¹¹⁹ Nomani F, The Interpretative Debate Of The Classical Islamic Jurist On Riba (Usury), 2002 www.sba.luc.edu (18 September 2003)

¹²⁰ Homoud S H, Islamic Banking: The Adaptation Of Banking Practice To Conform With Islamic Law, Arabia Information, London, 1985 at 49

¹²¹ Tamer S, The Islamic Financial System: A Critical Analysis And Suggestions For Improving Its Efficiency, Peter Lang, Frankfurt, 2005 at 41