Q289 :May I appeal to you to redefine “interest” so
that Muslim countries may be able to proceed with industrialization
that will benefit them. Islam is a way of life which does not stop
anything that benefits the Muslim netmunity. I have in mind a certain
case where a group of netpanies were about to set up a very large
thermal power station at an estimated cost of $ 1.5 billion. Just
before starting, a court verdict was issued that banned all
interest-bearing transactions. This chilled the bankers away and the
project did not materialize.
A289 : It is not for me to redefine interest. That
is a task for economists. What is forbidden in Islam is that which is
known in Arabic as “riba”, which we often translate as usury. I realize
that interest given or charged by banks is not exactly the same as
usury, but there is sufficient similarity to make Muslim scholars
consider interest as forbidden. Riba, or usury means the excess a
lender receives over and above the principle amount he advances to a
borrower. At the time when the Islamic message was vouchsafed to the
Prophet Muhammad (peace be upon him) people used to borrow money for a
specific term. When the time is due and the borrower does not have
funds to settle his debt, he would go to the lender and ask him to put
back the repayment date in return for an increase in the amount to be
repaid. That is strictly forbidden. You will agree that there is a
great similarity between this process and what happens when you borrow
money from a bank. If the loan is to be repaid over a longer period,
then what is actually repaid is larger than what would have been the
case if the principal amount was repaid over a short period. Banks
speak of “debt servicing” and the term is interest from the Islamic
point of view. However, not many religious scholars have had the type
of thorough knowledge of the banking system in order to reconsider the
netmonly known rulings which pronounce interest as forbidden, because
it is a type of riba or usury. A couple of years ago, the Mufti of
Egypt appealed for a redefinition of banking terms. This should be done
by bankers and economists who should nete forward and tell us in simple
language what is involved in every sort of banking transaction. When
they do it, religious scholars will be able to make a more scholarly
and well considered ruling about every type of transaction. But I must
point out that even the greatest project should be stopped if it
involves disobedience to God. Material prosperity should not be at the
expense of our more important duty of obeying God. If we place material
prosperity at par with our duty of obeying God, then we are grossly
mistaken. I should emphasize that this is a totally separate question
from that of redefining banking terms. I am here stating a principle.
We do not approve of disobedience to God to achieve prosperity. That
prosperity is bound to be short lived and acnetpanied by social evils.
The prosperity we look for is the one achieved through maintaining
Islamic principles which are sure to give us the progress we aspire
while enabling us at the same time to maintain an attitude of obeying
Allah.
Our Dialogue ( Source : Arab News – Jeddah )