There are two classification of Riba in Fiqh:
a) Riba al Nasiah- here the increase or growth is due to postponement. It can be specified in the beginning of transaction or on maturity of debt. If the debtor is not able to pay back the debt on maturity and the creditor gives him some more time in return for an additional amount it is termed Riba al Nasiah.
The term nasi'ah means to postpone, defer, or wait and refers to the time that is allowed for the borrower to repay the loan in return for the addition or the premium. Hence Riba al-Nasi'ah refers to the interest on the loan. It is in this sense that the term Riba has been used in the Qur'an in the verse "God has forbidden interest" (2: 275). This is also the Riba which the prophet, peace be on him, referred to when he said: "There is no Riba except in nasi'ah."
b) The prohibition of Riba al-Nasi'ah essentially implies that the fixing in advance of a positive return on a loan as a reward for waiting is not permitted by Islam. It makes no difference whether the return is a fixed or variable percent of the principle or an absolute amount to be paid in advance or on maturity, or a gift or service to be received as a condition for the loan. However, if the return on principle can be either positive or negative depending on the final outcome of the business, which is not known in advance, it is allowed provided that it is shared in accordance with the principles of justice, laid down in Islam.
c) Maulana Mududi in his Tafheem ul Qur’an gives a comprehensive definition of Riba al Nasi’ah, while commenting on verse 275 of Surah Al Bakara, he writes:
“At the time of the revelation of the Qur'an several forms of interest transactions were in vogue and were designated as Riba by the Arabs. Of these one was that the vendor sold an article and fixed a time limit for the payment of the price, stipulating that if the buyer failed to pay within the specified period of time, he would extend the time limit but increase the price of the article. Another was that a man loaned a sum of money to another person and stipulated that the borrower should return a specified amount in excess of the amount loaned within a given time limit. A third form of interest transaction was that the borrower and vendor agreed that the former would repay the loan within a certain limit at a fixed rate of interest, and that if he failed to do so within the limit, the lender would extend the time limit, but at the same time would increase the rate of interest. It is to transactions such as these that the injunctions mentioned here apply.”
“But those who devour interest become like the one whom Satan has bewitched and maddened by his touch. They have been condemned to this condition because…….” This is the Qur’anic injunction that is indicated in the above commentary.
The three types of Riba al Nasiah in Maududi’s view are:
i. Article is sold on deferred payment basis. Time of payment is fixed. Inability to pay on the stipulated time attracts extra amount and the payment date is extended.
ii. A sum is lent and it is determined at the beginning that the borrower would return an extra amount in addition to the amount loaned within a stipulated time.
iii. A sum is lent at a fixed rate of interest for a stipulated time period. If the borrower fails to pay the time as well as the rate of interest would increase.
Five characteristics of Riba al Nasiah are:
b) Riba al Fadl- here the increase is independent of postponement or maturity of debt. It happens when two same things are exchanged unequally. For example a kilo of wheat being exchanged for 1.5 kilos of wheat.
The Holy Qur'an had prohibited the Riba of Jahiliyya or Riba an Nasiah with all their forms already mentioned above. All these forms related to the transactions of a loan or a debt created by sale etc. But after the revelations of these verses, the Holy Prophet (PBUH), prohibited some other transactions as well, which were not known previously as Riba. The Holy Prophet (PBUH) felt that, given the commercial atmosphere at that time, certain barter transactions might lead the people to indulge in Riba. The Arabs used certain commodities like wheat, barley, dates etc., as a medium of exchange to purchase other things. The Holy Prophet (PBUH) treating these commodities as a medium of exchange like money, issued the following injunction:
"Gold for gold, silver for silver, wheat for wheat, barley for barley, date for date, salt for salt, must be equal on both sides and hand to hand. Whoever pays more or demands more (on either side) indulges in Riba ."
It means that if wheat is exchanged for wheat, the quantity on both sides must be equal to each other and if the quantity of any one side is more or less than the other, this transaction is also a Riba transaction, because in the tribal system of Arab these commodities were used as money, and the exchange of one kilogram of wheat for one and a half (1 1/2) kilogram of another wheat would stand for the exchange of one dirham for one and a half (1 1/2) dirham. However, this transaction was termed as Riba by the Holy Prophet (PBUH) and this leaning was not covered by the term 'Riba al- Jahiliyya '. Therefore, it was called as ' Riba al-fadl ' or ' Riba-al-sunnah '.
Now the Question that arises is that: Does Riba enter into every commodity or is it just confined to Gold, Silver, Wheat, Barley, Dates and Salt?
While prohibiting the Riba al-fadl , the Holy Prophet (PBUH) has identified only six commodities and it was not clearly mentioned in the above hadith whether this rule is limited to these six commodities or it is applicable to some other commodities as well, and in the latter case what are those commodities? This question raised controversy among the Muslim jurists. Some earlier jurists, like Qatadah and Tawoos, restricted this rule to these six commodities only, while the other jurists were of the opinion that the rule will be extended to other commodities of the same nature. Then there was a difference of opinion about the nature of these ommodities that might be taken as a common feature found in all the six commodities and a criterion for identifying the commodities which are subject to the same rule.
Below are the views expressed by the scholars of Four Schools of thought:
Imam Abu Hanifa and Imam Ahmad are of the opinion that the common feature of these six commodities is that they can either be weighed or measured, therefore, any commodity which is sold by weighing or measuring falls within this category and is subject to the same rule, if it is bartered with a similar commodity.
Imam al-Shafii is of the view that the common feature of these six commodities is that they are either eatables or they are used as a universal legal tender. Wheat, barley, date, salt represent eatables while gold and silver represent universal legal tenders. Therefore, according to Imam al- Shafii all eatables and universal legal tenders are subject to the rule mentioned in the hadith.
Imam Malik is of the opinion that the common feature among these six commodities is that they are either food items or they can be stored. Therefore he holds that everything that is a food item or can be stored is included in the same category, hence, subject to the same rule.
This difference of opinion among the jurists was based on the fact that after specifying the six commodities the Holy Prophet (PBUH) did not expressly mention whether or not other commodities will assume the same status.
Most scholars agree that the major characteristic or efficient cause on the basis of which one may extend the rules of Riba to other commodities by analogy is “their being in the nature of money”. The Jurists think that the Riba -al fadl does not imply that money, commodities, capital which involve Riba are only these six things and that the mention of hukm al- Riba in these six things was for the reason that the economic transactions in the times of the Prophet were, in general limited to these six commodities. Thus, rules of Riba would apply to anything that serves the functions of money.
Analyzing the view of three of the four great Imams and other Islamic scholars, I strongly believe that Riba is not just confined to the six articles mentioned in the hadith (i.e. gold, silver, wheat, barley, dates and salt) but to every commodity that is traded in the market today and is in common use by the people in that particular geographical location. The prophet (PBUH) mentioned only six articles because those were the commodity known to the people of that time. In the present scenario commodities like tea, sugar, cornflakes etc. are known to the people and the same rule applies to them. Those who say that Riba al Fadl is restricted to only six article would also say that the modern brand of intoxicants such as whiskey, Brandy, rum etc (May Allah save us from all these things) would not be Haraam? I again state that Riba is not restricted to the name six commodities only but to every commodity that can be weighted, measured, those are eatables, those that are used as legal tenders, and those that are used for consumption purpose in any form. And Allah knows best what the Truth is.
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