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Quranic Verses on Riba

The practice of riba (usury or interest) has been a subject of significant ethical, economic, and religious debate across different cultures and societies. In the Islamic faith, riba is strictly prohibited due to its exploitative nature and the negative impact it can have on both individuals and society. The Quran, as the foundational text of Islam, contains several verses that provide warnings and guidelines concerning riba. While these verses come from a religious context, the underlying principles have relevance for individuals and societies beyond religious affiliations, especially in promoting economic justice and fairness.

What are Surahs and Quranic Verses?​

Surah​

  • A Surah is a chapter in the Quran. The Quran, which is the holy book of Islam, is divided into 114 Surahs. Each Surah varies in length and covers different aspects of life, ethics, spirituality, law, and guidance. The Surahs were revealed over 23 years, with some chapters being very short and others longer. The term Surah is derived from the Arabic word "Sura," meaning "a division or a chapter."

Quranic Verses​

  • A verse in the Quran is known as an Ayah (plural: Ayat). Each Surah is made up of individual verses that vary in length. Quranic verses are considered to be the direct words of Allah, conveyed to the Prophet Muhammad ﷺ through the Angel Jibril (Gabriel). The verses offer guidance on all aspects of life, and they address everything from ethics and social behavior to laws and spiritual guidance. The Quran is often read and recited by Muslims in Arabic, as the verses are considered to be divinely preserved in their original language.

1. Surah Al-Baqarah (2:275)​

"Those who consume riba will stand on the Day of Judgment like one beaten by Satan into insanity. That is because they say, 'Trade is just like riba.' But Allah has permitted trade and forbidden riba. So whoever receives an admonition from his Lord and stops, may keep what was before, and his case rests with Allah. But whoever returns to it, they are the companions of the Fire; they will abide therein."

1.Explanation​

  • This verse highlights the severe consequences for those who engage in riba (usury or interest). In Islamic belief, individuals who exploit others through interest-based transactions will face spiritual consequences. The Quran contrasts riba with trade, indicating that while trade is lawful and beneficial, riba is unjust and exploitative.
  • The verse also offers a path for repentance. If a person abandons interest-based transactions, their past dealings are forgiven. However, those who persist in riba are warned of eternal punishment.
  • From a broader perspective, this verse stresses the importance of fairness in financial transactions and emphasizes that financial systems should promote equity rather than exploitation.

2. Surah Al-Baqarah (2:276)​

"Allah destroys riba and increases charity. And Allah does not love any ungrateful sinner."

2.Explanation​

  • This verse points out the negative long-term effects of engaging in riba. While it may seem like riba brings financial gain, it leads to moral decay and economic instability in the long run.
  • In contrast, charity (sadaqah) leads to genuine prosperity, not just in a material sense, but also in terms of spiritual growth. The verse suggests that sharing wealth with those in need fosters social cohesion and reduces inequality.
  • This perspective aligns with many global ethical frameworks that emphasize the importance of generosity and redistribution for social well-being.

3. Surah Al-Baqarah (2:278-279)​

"O you who believe! Fear Allah and give up what remains due from riba, if you are believers. And if you do not, then be informed of war from Allah and His Messenger. But if you repent, you may have your principal—neither will you do wrong nor will you be wronged."

3.Explanation​

  • This is a strong warning against the continuation of riba-based transactions. From an ethical standpoint, the verse emphasizes that financial dealings should be based on fairness and mutual respect, rather than exploitation.
  • The concept of repentance and rectifying past wrongs is central here. Individuals are encouraged to return to ethical practices, where the lender receives only their original loan—without exploiting the borrower with interest.
  • From a social justice perspective, the message here advocates for economic equality, where both parties in a transaction are treated fairly, and wealth does not accumulate at the expense of others.

4. Surah Aal-e-Imran (3:130)​

"O believers, do not consume riba, doubled and multiplied, but fear Allah so that you may be successful."

4.Explanation​

  • This verse specifically condemns the practice of compounded interest, which can cause debts to spiral out of control. The interest grows exponentially over time, leading to financial hardship for the borrower.
  • It is a call to ethical financial conduct, urging individuals to act in ways that benefit society as a whole. While it specifically addresses the believers, the principle of avoiding exploitative financial practices is universal and applicable to all people, regardless of their religious beliefs.
  • The message is clear: Financial systems should encourage fairness and transparency, not lead to the accumulation of wealth at the cost of others' suffering.

5. Surah An-Nisa (4:161)​

"And for their taking of riba, although they were forbidden from it, and their consuming of people’s wealth unjustly. We have prepared for the disbelievers among them a painful punishment."

5.Explanation​

  • This verse reflects on the historical context where riba was also forbidden for previous religious communities, such as Jews and Christians. It points out that despite the prohibition, some individuals still participated in interest-based transactions, causing injustice and inequality.
  • The verse stresses that riba leads to the unjust consumption of wealth, and those who engage in it are seen as contributing to economic injustice and social inequality.
  • This highlights the universal moral principles against exploiting others financially, making it relevant to all systems that aim for a fair and just economic structure.

6. Surah Ar-Rum (30:39)​

"And whatever you give in riba to increase the wealth of people does not increase with Allah. But what you give in charity, seeking the pleasure of Allah, it is they who will get a manifold increase."

6.Explanation​

  • This verse contrasts the benefits of riba with the benefits of charity. It emphasizes that money gained through interest-based transactions lacks true value, while wealth distributed for the sake of helping others yields greater, lasting rewards.
  • The idea that charity has true value, both materially and spiritually, aligns with global ethical frameworks advocating for wealth distribution, community support, and reducing poverty.
  • From a universal standpoint, the verse teaches that helping others through acts of kindness and charity brings about greater social and individual benefits than practices based on exploitation.

Conclusion​

The Quran provides a strong framework that emphasizes the importance of ethical financial dealings and social justice:

  • Riba is seen as exploitative, leading to economic instability, moral decay, and inequality.
  • While riba may appear to offer financial growth, it ultimately leads to negative consequences for individuals and society, while charity leads to long-term prosperity and spiritual well-being.
  • The Quran advocates for systems of trade and finance that are based on fairness, mutual benefit, and risk-sharing. These principles align with broader ethical and economic values, which seek to reduce inequality and promote fairness in financial transactions.

By following these principles, societies can create more just and sustainable financial systems, where wealth circulates equitably, benefiting everyone rather than a select few. These lessons have relevance beyond religious contexts, offering insights for building a more ethical, inclusive, and compassionate global economy.