Bismillāh.
يَمْحَقُ اللَّهُ الرِّبَا وَيُرْبِي الصَّدَقَاتِ ۗ وَاللَّهُ لَا يُحِبُّ كُلَّ كَفَّارٍ أَثِيمٍ
Allah does not bless usury but He makes charities flourish. Allah does not like any sinful ingrate.
(Sūrat al-Baqarah, No. 2, Āyat 276)
Aside from befriending the enemies of religion, there is no other sin that has been dealt with as harshly as that of interest (ribā) in the verses of the Noble Quran and the narrations of the Ahl al-Bayt (peace be upon them). In the above verse Allah says that interest will have no blessings in it and will result in a loss for the person who partakes in it, both in this world and the hereafter. In the previous verse Allah describes how such people will be raised on the Day of Judgement, “like one deranged by the Devil’s touch” (Q 2:275). In a later verse on the same page Allah describes interest as being a declaration of war against Allah and His apostle (Q 2:279). These are but some outstanding Quranic examples found in Sūrat al-Baqarah. Narrations of the Ahl al-Bayt are also extremely harsh in discussing usury. One narration from the sixth Imām (peace be upon him) describes taking a single silver coin in interest as being worse than committing adultery seventy times with a family member. In another narration, the Messenger of Allah (peace and blessings be upon him and his family) curses all those associated with the act of taking interest, even the one who bears witness or the one who writes down the agreement.
As opposed to these traditions, the lawful seeking of income and the act of giving interest-free loans (qard al-hasanah) has been highly lauded in Islam. In one narration from the Noble Messenger, he says that worship consists of seventy parts, the best of which is to seek lawful sustenance.
The earlier mentioned harsh statements indicate the grave nature of this sin, and they can be attributed (at least in part) to the dire social repercussions of taking interest and charging usury. Note that the word usury in English refers to an excessively high rate of interest, whereas that which is forbidden in Islam is any amount of interest. Regardless, when interest or usury becomes widespread in society it results in the monopolization of wealth in the hands of a rich minority. It leads to economic inequality which itself can lead to other problems such as violence and crime.
In today’s world, it would appear difficult if not impossible to imagine how economies and financial institutions would operate without interest. For this reason, our jurists (may Allah preserve them) have applied their ijtihād and advised the community on what needs to be done when one must take out a mortgage for a house. Details can be found in their Risālah (Islamic Law books). Nonetheless, even if we are forced to engage in it at an individual level, we must still recognize the problems associated with the system at large. Despite the complex nature of these institutions today and outstanding material progress that they have helped achieve, there is no doubt that they are also the source of problems and injustices. Consider the economic inequality, corporate greed, and influence of money in politics that is commonplace in the world today. Is this not (at least in part) the result of an
economic system that depends on interest? For this reason, recent Muslim thinkers such as the Shī’ī Sayyid Muhammad Baqir al-Sadr or the Sunnī Abū al-A’lā Mawdūdī have tried to work on this subject, illustrating the evils of interest and presenting what the Islamic economic system would look like. Despite such commendable efforts by these two deceased scholars and other contemporary Muslim thinkers, much work remains to be done in this field.
We pray to Allah to bless such concerned Muslim thinkers who bravely try to address modern issues with a truly Islamic solution. We beg Him to bless us with a lawful sustenance in our life and allow us to always stay aloof from sins such as interest. Lastly, we implore Allah by the sake of His beloved servants to bring about a lasting economic justice in the world and not allow the rich to abuse the poor.
Sources: Shahīd Dastghayb Shīrāzī, The Greater Sins.