The Riba Rebuttal, by Shaykh bin Baz
Shaykh Abdul-Aziz bin Baz was the the Grand Mufti of Saudi Arabia and one of the most respected Islamic jurists of the last century.
During his tenure he opined on many of the complex issues faced by the Muslims in modern times. His prolific fatawa are often referred back to as a source of knowledge and relied on by the scholars and students of knowledge of today.
This article summarizes his arguments in the work a Warning Against Riba Transactions which serves to rebut many arguments used today by those who wish to justify or engage in transactions that would otherwise be impermissible.
What proceeds in the “Rebuttals” are words put forth by Shaykh bin Baz himself in an abridged form.
Argument: Engaging in Riba Transactions and having Riba based Financial Institutions is Necessary to Strengthen the Economies of Muslim Countries and therefore Strengthen the Ummah.
Bin Baz’s Rebuttal: Whenever Muslims sincerely preserve Allah’s Commandments and recommend one another to preserve the righteous Islamic Law, then Allah will make their conditions better and will bless their wealth and work. Further, the established Islamic economic practices since the time of the Prophetﷺ, until the present time when banks are widely established, affirm the falsehood of this statement. Allah gave victory to early Muslim generations over their enemies, until Muslims and the Islamic empire became masters of the world, for many centuries. During these glorious centuries, Muslims referred to what Allah has revealed for judgments in their rule. They did not have any need for banks or usury. During that golden era, Muslim economy was the purest, the largest and the strongest, without ever needing to rely on Riba. Allah gave victory to His religion and raised the flag of Islam high through these early believers, bestowing on them vast provisions; truly, the riches of the earth were uncovered for them.
Rather, if one says that usury and banks were and still are the true causes behind many problems and divisions among Muslims and behind the weakness in Muslim economies, the hatred that spread between them and the shattering of the Islamic unity, one will surely be saying the truth. This is because usury causes hatred and enmity between people, eradicates Allah’s blessings and warrants His punishment. Furthermore, we must state here that because of Riba, debts keep on accumulating and multiplying, leading the indebted individuals and nations to suffer from rising unemployment and recessions. In such conditions, those who have capital prefer to lend their money in return for high interest returns, instead of investing in beneficial projects, such as building factories, construction projects, and so forth.
On the other hand, the various business transactions that Allah has allowed will surely benefit the Ummah, and mankind on the whole, and will ensure an increase both in wealth and piety for them. Also, what Allah legislates and allows will certainly provide work for the unemployed and help for the poor, so that they acquire an honorable means of livelihood. Hence, the entire community will benefit from the absence of Riba and from begging others for help and indulging in the impermissible means of amassing wealth.
As compared to all these beneficial methods of economic activity that Allah permitted for Muslims, Riba harms and works against healthy economies and public interest, often causing severe economic disasters, as all those who have a sound mind would concur. Muslims must never forget that relying on usury as a legitimate business transaction eradicates Allah’s blessings, gives power ones enemies and to and brings Allah’s wrath. Muslims will suffer economically, and Allah’s blessings will decrease, as a result of deviating from Allah’s Law and abandoning what He ordered and the business transactions He has allowed.
Argument: Riba is Not Interest as Understood Today.
Bin Baz’s Rebuttal: Surely, there are several authentic ahadith that clearly state that any loan that incurs interest, even if the interest was minute, is Haram (prohibited).
Argument: Necessity makes “Beneficial Practices,” including Riba Permissible.
Bin Baz’s Rebuttal: The “beneficial practices” that are allowed are matters of Ijtihad (personal opinion) and that do not contradict a clear Text in the Qur’an or the Sunnah. It is a fact that clear texts in the Qur’an and the Sunnah state that both Riba Al-Fadhl (exchanging a commodity of a better quality for more of the same commodity of a lesser quality and vice-versa) and Riba An-Naseeah (interest) are not permissible for Muslims.
Argument: Riba based Transactions are Beneficial for the Lender and the Borrower.
Bin Baz’s Rebuttal: We should state here that Riba is not prohibited only because usury transactions require the needy to pay the incurred interest. Riba is `Haram (prohibited) because of the injustice it exerts on the needy who have to pay the accumulating interest, and also because it is a prohibited type of transactions. Certainly, forcing the needy to pay the Riba on their debts is a great injustice, especially since [Islamically] the lender is required to be patient with the needy borrower, not illegally increase the principal of his debt. In addition, Riba is still disallowed even when it brings a mutual benefit for both the lender and the indebted person. Islam does not take this mutual benefit from Riba into consideration. Rather, Riba is `Haram any way you look at it.
If Islam considered mutual agreement and benefit from Riba by the lender and the borrower a factor that allows Riba transaction, Allah would have informed us of this fact in His Glorious Book, or by the words of His Messengerﷺ. It is a fact that our Prophet ﷺ is the best of Allah’s prophets and messengers and that he perfectly delivered Allah’s Message. Consequently, if Islam had considered the mutual benefit from Riba a factor for allowing it, then the Prophetﷺ would have informed the Muslim Ummah of this fact. On the contrary, the fact is that the Prophetﷺ clearly stated in his Hadiths that all types of Riba are `Haram (impermissible), and just as Allah stated in many Ayat, the Sunnah explains the Quran.
Argument: Modernity Requires us to Reevaluate the Use and Permissability of Riba because Modern Interest is Different than the Riba of the Past.
Bin Baz’s Rebuttal: In response to this sweeping claim, we should first state the fact that the current banking transactions are not different from the prohibited Riba transactions. Further, Allah sent Muhammad as the Final Messenger from Him, and required all mankind, starting with the Prophet’s contemporaries up until the Day of Judgment, to implement His Commandments that He revealed to His Messenger ﷺ. Therefore, all new types of dealings should carry the same rulings as old types of dealings, as long as both types are essentially the same. We must also state that having different names does not change the true reality of these dealings. What matters, is the true substance and the true essence of these types of dealings.
Further, it is a well-known fact that the aims and goals of those who indulged in Riba in the past are similar to the aims of those who indulge in Riba in the present time, even though they changed the names of the transactions they use. Hence, differentiating between the old types of business transactions and the new ones, because of the different names and styles, while disregarding the aims and goals behind such transactions, is indeed a misguided method.
Further, we state the fact that in modern times, people do not need to deal in Riba to sustain their livelihood.
Argument: A Salam Contract is Similar to a Riba Based Loan because of the Delay and Therefore the Latter should be Permissible.
Bin Baz’s Rebuttal: As-Salam entails the promise of delivering a certain good with known characteristics on a certain future date, but the profit is paid on the spot. Both the seller and the buyer share in the benefit of As-Salam: the seller benefits from the price to spend on his current needs, and the buyer benefits from the Salam when he receives it since he bought it for a lesser price. Hence, both parties to the Salam transaction gain a benefit, none of them is harmed in any way, as there is no Riba (usury, addition, or interest) in this case, and finally, no goods with an unknown quality are being sold.
As-Salam type of transactions were allowed because Allah allowed it, a fact that demonstrates the greatness of the Islamic legislation that aims to benefit the Muslim Ummah at large. Further, Allah restricted the Salam type of transactions in a way that made it different from the disallowed types of business transactions.
No Muslim is allowed to render permissible what Allah has rendered `Haram, by comparing the disallowed matter to another matter that Allah has allowed. Indeed, whoever does this will have committed a major sin and will be saying about Allah what he has no knowledge of. Also, such a person will have opened a door of Fitnah (mischief) and sinning for the people.
The scholars who use Qiyas (analogical reasoning) state that Qiyas is only allowed [and pertains to] when a minor aspect of the religion does not have a definite ruling in the Qur’an or Sunnah. In this case, the scholars apply a general ruling [through Ijtihad] that includes the matter under discussion and derives a ruling for it, whereas before, it did not have a specific ruling.
For a more detailed analysis of the Shaykh’s opinion, his evidence from the Quran and Sunnah, also including insightful commentary by the translator, I highly suggest all readers to review the full translation by Jalal Abualrub here: https://archive.org/details/AnImportantWarningAgainstRibausuryInterestTransactions
