Summary of Feqh - Section Two: The Ruling on Usury and the Invalidity of a Usurious Contract

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Section Two: The Ruling on Usury and the Invalidity of a Usurious Contract

The First Topic: The Ruling on Usury
Usury (Riba) is prohibited in all its forms, [7] -Interest of Loans, Interest of Surplus, and Interest of Deferred Payment. Usurious production loans are also prohibited. This refers to a loan for which an interest rate is set based on the amount borrowed and the duration of the loan. Refer to: The Fifth Resolution of the Islamic Fiqh Council of the Muslim World League in its Tenth Session, and Resolution No. 3 issued by the Islamic Fiqh Council under the Organization of Islamic Conference. whether small or large amounts. [8]- Al-Sarakhsī said: "Allah, the Exalted, mentioned five punishments for the consumer of usury Ribā": The first punishment: Confusion and bewilderment (takhabbuṭṭ): Allah, the Exalted, said:"Those who eat Riba (usury) will not stand on the Day of Resurrection except like the standing of a person beaten by Shaitan (Satan) leading him to insanity." (Al-Baqarah: 275). The second punishment: Erasure and diminishment (maḥq): Allah, the Exalted, said:"Allah will destroy Riba usury." (Al-Baqarah: 276). The third punishment: War (ḥarb): Allah, the Exalted, said:" And if you do not do it, then take a notice of war from Allah and His Messenger (صلى الله عليه وسلم)." (Al-Baqarah: 279). The fourth punishment: Disbelief (kufr): Allah, the Exalted, said:"O you who believe! Be afraid of Allah and give up what remains due to you from Riba usury from now on wards, if you are really believers." (Al-Baqarah: 278). And Allah, the Exalted, said:"And Allah likes not the disbelievers, sinners." (Al-Baqarah: 276). That is: a sinner who justifies usury (Ribā) is a transgressor, while one who consumes usury is sinful and wicked. "The one who deliberately and knowingly denies the prohibition of usury (Riba) that all Muslim scholars unanimously agreed upon (Consensus, Ijmāʿ) becomes a disbeliever. But this happens after the evidence is established against him, and all the correct proofs and definitive evidence are clarified and explained to him from every perspective, along with the removal of any doubts (shubuhat) he has regarding this matter (Riba)" (Comment of the Translator). The fifth punishment: Eternal dwelling in the Hellfire. Allah, the Exalted, said: "…But whoever returns [to Riba ], such as dwellers of the Fire – they will abide therein forever." (Al-Baqarah: 275); " Al-Mabsūṭ"( 12/96).
The Evidences:
From the Qur'an:

(1) Almighty Allah said: "Whereas Allah has permitted trading and forbidden Riba (usury)." (Al-Baqarah: 275)

(2) Almighty Allah said in the Qur'an: "O you who believe! Be afraid of Allah and give up what remains due to you from Riba usury from now onwards, if you are really believers. And if you do not do it, then take notice of war from Allah and His Messenger صلى الله عليه وسلم but if you repent, you shall have your capital sums. Deal not unjustly by asking more than your capital sums, and you shall not be dealt with unjustly by receiving less than your capital sums." (Al-Baqarah: 278-279)
Secondly: From the Sunnah
(1) On the authority of Abu Huraira رضي الله عنه, the Prophet صلى الله عليه وسلم said: "Avoid the seven destructive sins." They asked: "O Messenger of Allah, what are they?" He replied: "Associating partners with Allah, practicing magic, killing a soul which Allah has forbidden except by right, consuming usury (Riba), consuming the wealth of an orphan, fleeing from the battlefield at the time of combat, and slandering chaste, believing, unaware women." [9] - Reported by Al-Bukhārī (2766) & the wording is attributed to him And Muslim(89).
(2) On the authority of Jabir رضي الله عنه he said: "The Messenger of Allah صلى الله عليه وسلم cursed the one who consumes usury (Riba), the one who gives it, the one who writes it, and its two witnesses, and said: 'They are all the same.'" [10] - Reported by Muslim (1598).
Thirdly: from the consensus (ijmāʿ) [11] - There has been disagreement attributed to Ibn ʿAbbās on the issue of "Ribā al-faḍl" (usury of excess), as he permitted it. A similar view is also narrated from Usāmah ibn Zayd, Zayd ibn Arqam, Ibn al-Zubayr, and al-Barāʾ. However, it is also reported that Ibn ʿAbbās later retracted this opinion. Ibn ʿAbd al-Barr said: "No one from among the Companions, the Tābiʿīn the followers, or the later jurists of the Muslims supported Ibn ʿAbbās' interpretation in his statement regarding the Hadīth of Usāmah. Except for a group of Makkans who adopted his view and that of his companions, they are refuted by the established Sunnah, which is the evidence against anyone who opposes it or is ignorant of it. No one is an authority over it, and it has been narrated that Ibn ʿAbbās retracted this view." "al-Istidhkār"(6/352). The scholars have explicitly stated that the disagreement on this matter has ended, and the consensus (ijmāʿ) has settled on the prohibition of Ribā al-faḍl. Al-Sarakhsī, after mentioning the narration from Ibn ʿAbbās رضي الله عنهم, said: "The consensus of the Tābiʿīn رضي الله عنهم after him nullifies his statement." "al-Mabsūṭ"(12/97). Al-Mardāwī, when mentioning those behind whom prayer is not allowed, said: "Nor should one pray behind those who permit Ribā al-faḍl, such as selling a dirham for two dirhams, due to the current consensus on its prohibition." "al-Inṣāf" (2/180). Ibn Bāz also said: "All of this is unanimously prohibited: Ribā al-nasīʾah (usury of delay) and Ribā al-faḍl (Excess usury). There has been a disagreement reported from some of the early generations Salaf regarding Ribā al-faḍl, but it has since ceased. Ribā al-faḍl and Ribā al-nasīʾah are both unanimously prohibited because the narrations on this matter from the Prophet صلى الله عليه وسلم are numerous." "Majmūʿ Fatāwā wa Rasāʾil Ibn Bāz"(30/308). Also refer to: "al-Mughnī" by Ibn Qudāmah (4/3) ; and "al-Majmūʿ Sharḥ al-Muhadhdhab" with the supplement by al-Subkī (10/27).
The consensus on this matter has been transmitted by Ibn al-Mundhir [12] - Ibn al-Mundhir said: "They unanimously agreed that the six categories, whether exchanged with disparity or deferred, neither are permissible; it is forbidden." Al-Ijma'", p. 97. He also said: "They unanimously agreed that if the lender stipulates a gift or an increase when lending, and the borrower agrees to this, then taking the extra amount is considered Riba usury." "Al-Awsat"(10/407). and Ibn Ḥazm, [13] - Ibn Hazm said: "They unanimously agreed that Riba (usury) is prohibited." Maratib al-Ijma', p. 89. He also said: "Riba only occurs in sales, loans, or salam forward contracts, and there is no disagreement about this from anyone...Thus, it is not permissible to lend something with the condition that it be returned to you in a lesser or greater amount, or in any other form whatsoever, except in the exact kind and amount you lent, as we have mentioned in the "Book of Loans" in this work of ours, which suffices from repetition. This is a definitive consensus." "Al-Muhalla"(7/401- 402). Abu al-Walid al-Baji, [14] - Abu al-Walid al-Baji said: "The Riba usury of the Jahiliyyah (pre-Islamic period) was when the creditor would say to the debtor at the time of repayment: 'Will you repay, or will you increase the debt?'—meaning, to increase the amount of the debt. If the debtor chose to increase the debt in exchange for extending the time of repayment, he would do so. There is no disagreement among Muslims regarding the prohibition of this practice." "Al-Muntaqa Sharh al-Muwatta" (5/65). Ibn Rushd, [15] - Ibn Rushd said: "The scholars have unanimously agreed that both disparity and deferment are prohibited when dealing with a single category of the items mentioned explicitly in the Hadith of ‘Ubadah ibn al-Samit." "Bidayat al-Mujtahid"( 2/129). Al-Nawawi, [16] - Al-Nawawi said:"The Muslims have unanimously agreed on the prohibition of riba usury in general." "Sharh Sahih Muslim"(11/9). He also said: "The Muslims have unanimously agreed on the prohibition of riba and that it is among the major sins." "Al-Majmu‘"( 9/391). He further said: "They unanimously agreed that it is not permissible to sell riba-based items of the same kind if one of them is deferred, and that it is not permissible to engage in disparity when exchanging the same kind, such as gold for gold, in immediate transactions." "Sharh Sahih Muslim" (11/9). Ibn Qudamah, [17]- Ibn Qudamah said: "Section: Riba (usury) is of two types: Riba al-fadl (usury of excess) and Riba al-nasi'ah (usury of deferment). The scholars unanimously agreed on the prohibition of both." "Al-Mughni"(4/3). He also said:"Any loan in which an increase is stipulated is haram prohibited without any disagreement." "Al-Mughni"( 4/240). Ibn Taymiyyah, [18] - Ibn Taymiyyah said: "Riba (usury) is prohibited by the Qur'an, the Sunnah, and consensus." "Majmu' al-Fatawa"(29/418). Al-Zayla‘i, [19] - Al-Zayla'i said: "Riba usury is prohibited by the Qur'an, the Sunnah, and the consensus of the Ummah All the Muslims." "Tabyin al-Haqaiq"(4/85). Al-Shawkani, [20] - Al-Shawkani said: "There is no disagreement among Muslims regarding the prohibition of Riba (usury)." "Nail al-Awtar"( 5/225). Al-San‘ani, [21] - Al-San‘ani said: "The Ummah community has unanimously agreed on the prohibition of Riba (usury) in general." "Subul al-Salam"(3/36). and others.

The Second Topic: The Ruling on Riba-Based Contracts.
The Riba-based contract is null and void, and both parties to the contract must return the two exchanged items. This is the view of the majority: the Malikis, [22] - According to the Malikis:"It is necessary to return the exchanged items unless they have been lost, in which case their value must be given." "Mawahib al-Jalil" by al-Hattab (6/263) and "Hashiyat al-Dusuqi on al-Sharh al-Kabir"(3/71). Shafi'is, [23] -"al-Majmu‘ " by Al-Nawawi(9/404) and "Rawdat al-Talibin" by Al-Nawawi(3/408). and Hanbalis. [24] - "Kashaf al-Qina' "by Al-Buhuti(3/149-150) and "Matali‘ Uli al-Nuha" by Al-Ruhaybani(3/5).
The Evidences:
From the Sunnah:
(1) It is narrated on the authority of Abu Sa'id رضي الله عنه that he said: "The Messenger of Allah صلى الله عليه وسلم was brought some dates, and he asked, 'Are these dates similar to ours?' The man replied, 'O Messenger of Allah, we sold our dates, two measures for one measure of this.' The Messenger of Allah صلى الله عليه وسلم said, 'This is Riba (usury), return it, then sell your dates and buy from this.'" [25] - Narrated by Muslim (1594).
Reasoning:
This Hadith explicitly rejected the usurious sale. [26] - See: "Al-Tamhid" by Ibn 'Abd al-Barr(20/58).
(2) It is narrated on the authority of Jabir رضي الله عنه that the Prophet صلى الله عليه وسلم said: "Indeed, everything from the matters of Jahiliyyah pre-Islamic ignorance is beneath my feet, nullified... and the Riba of Jahiliyyah is nullified. The first Riba I abolish is the Riba of 'Abbas ibn 'Abd al-Muttalib; it is entirely abolished." [27] - Narrated by Muslim (1218)
Reasoning:
(1) When the Prophet صلى الله عليه وسلم returned the people to their principal amounts, it nullified the transaction that involved Riba. [28] - See: "Ma'rifat al-Sunan wa al-Athar" by Al-Bayhaqi (8/29), which is from the words of Al-Shafi'i, may Allah have mercy on him.
(2) What Has Been Explicitly Prohibited Cannot Form a Valid Contract, and Such Contracts Must Be Nullified. [29] - See: "Al-Tamheed" by Ibn Abd al-Barr (20/58).