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to the principal irrespective of deferred repayment and is not offset by anything in return. Basically, two unequal amounts of the same type of asset are ex- changed. Ahmed elaborates, “This happens when an irdab of wheat is exchanged hand to hand for an irdab and a kilah (another measure) of its own coun- terpart, the buyer and the seller both taking recipro- cal possession; or when ten carats of gold produce are exchanged for 12 carats of similar gold produce.” This practice is only haram, however, if one party’s payment of an excess amount is compulsory. If that party so wishes to pay the excess as a goodwill ges- ture, or just for the sake of it, that is permitted. Also, the act of riba al-fadl can only be committed in the exchange of six particular commodities, namely gold, silver, wheat, barley, dates and salt.
One might think that this subdivision of the term riba might make it easier to attain a general consensus on its definition but this is very much not the case. Indeed, it throws up further points of contention. This is because some experts believe riba al-fadl is not a form of riba at all and that the one true defini- tion of riba is the definition relating to what we have just identified as riba al-nasiah. One of the earliest examples of a revered Islamic icon who did not rec- ognise riba al-fadl is Abd Allah ibn Abbas, who was a paternal cousin of the Prophet himself. An expert in Tafsir (exegesis of the Qur’an), Ibn Abbas is recorded as stating that he had not found any evidence in the Qu’ran or any hadith for the existence of riba al-fadl.
Other exegetes of the Qur’an also appear to ignore riba al-fadl, giving a definition of riba that is essen- tially a definition of riba al-nasi’ah. Imam Abubkar Al-Jassas’ definition of riba is based on the Jahiliyya Arabs’ understanding of it. In his seminal work Ahka- mul Qu’ran, the distinguished Hanafi jurist writes, “the riba which was known to and practiced by the Arabs was that they used to advance loan in the form of Dirham (silver coin) or Dinar (gold coin) for a cer- tain term with an agreed increase on the amount of principal advanced”. He then goes on to define riba thus, “The riba of Jahiliyya is a loan given for a stipu- lated period with a stipulated increase on the princi- pal payable by the loanee.” As you can see there is no mention of exchanges of commodities.
Ambiguity as a Legal Loophole? There have been several court cases in which the banning of riba from Islamic banking has been con- tended on the basis that it is impossible to ban an ac- tivity with an ambiguous definition. In one such case involving Habib Bank Ltd., the institution’s counsel, Abu Bakr Chundrigar, built his argument around a 1994 article, written by the late Justice Qadeerud- din Ahmad for the Pakistan newspaper Dawn, that highlighted the ambiguity of the term riba. The same argument has been cited by a number of other appel- lants as a reason why riba is not actually haram. They argue that Qu’ran verses discussing riba are mu- tashabihaat (ambiguous or confusing in meaning). According to these appellants, because the Qur’an decrees only verses that are muhkamaat (clear in meaning) should be obeyed, the verses condemning riba do not need to be obeyed.
In 1999, however, the Supreme Court of Pakistan categorically refuted this argument as part of its fa- mous judgement on interest. The text of this judge- ment states, “This argument is fallacious on the face of it, because in the verse of Surah al-Baqarah, Allah almighty declared war against those who do not avoid the practice of riba. How could one imagine that Al- lah Almighty [...] can wage war against a practice, the correct nature of which is not known to anybody? In fact the term Mutashabihaat used in the beginning of Surah Al-i-’Imran [...] refers to two kinds of verses: firstly, they refer to some words used in the beginning of different Surahs, the correct meaning of which is not known to anybody for sure [...] but the ignorance of the correct meaning of these words does not affect the lives of Muslims because no precept of sharia’a has been given through these words. Secondly, the word mutashabihaat refers to some attributes of Al- mighty Allah, the exact nature of which is not conceiv- able by a human being [...] Nobody knows what is the nature of the hand of Allah, nor is it necessary for one to know, because no practical issue depends on its knowledge”.
There is unlikely to ever be general consensus on the definition of riba. One could define it by explaining what it is and backing up the explanation with an il- lustration, but, as is the case with riba al-fadl, one can explain a certain activity as riba only to be told that no, it is not riba. It would seem that the only defi- nition of riba that is widely accepted is the broadest: the receipt or giving of a payment that is not rewarded with a return. In the context of Islamic banking, most understand prohibition of riba to be the prohibition of levying or paying interest. Given that the modern conventional finance system is so rooted and reliant on such interest, perhaps this is the definition most currently relevant to Islamic finance and therefore the one that counts the most.
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Additional Reading:
Maulana Justice Taqi Usmani and others, The Su- preme Court of Pakistan’s Judgement on Interest (selected text), December 1999, The Supreme Court of Pakistan
Mohammad Omar Farooq, Riba, Interest and Six Hadiths: Do We Have a Definition or a Conun- drum?, Review of Islamic Economics, Vol. 13, No. 1, 2009, pp. 105–142
Ziaul Haque, The Nature of Riba Al-Nasa’i and Riba Al-Fadl, Islamic Studies, Vol. XXI (1982)
Azeemuddin Subhani, The Islamic Doctrine of Riba Prohibition: A Modular Hermeneutical Ex- amination, MS Thesis, McGill University, 2001
Liaquat Ali, Riba: What Part of ‘Give it Up’ do You Not Understand?, December 2009, Truly Interest Free
2010 October Global Islamic Finance 67
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