The Supreme Court of Pakistan, in determining the applications and implications of the term “Riba” asked for assistance of religious scholars and other interested people of the country. For this purpose, answers to ten questions were sought. The fourth among these questions was:
Is there any difference between a Muslim and a non-Muslim in the matter of prohibition of Riba? Can the prohibition of Riba be extended to the loans obtained from non-Muslim, or for that matter, Muslim foreign countries, whose laws and national policies, together with international monetary laws and policies, are not within the control of the state of Pakistan?
My Reply to this question follows:
It is quite clear from the Qur’an that in an Islamic state no one – whether Muslim or non-Muslim – shall be allowed to take “Riba”. There is absolutely no difference in this case between the Muslim and the non-Muslim citizens of an Islamic state.
Moreover, it should be clearly understood that the prohibition of Riba by the State of Pakistan or any other Muslim state shall actually entail prohibiting individuals (whether Muslims or non-Muslims) as well as institutions (whether owned by Muslims or non-Muslims), that operate within the jurisdiction of the state, from taking Riba. It is quite clear from the related verses of the Qur’an that the real and actual prohibition applies to taking or devouring Riba. The prohibition of giving Riba, which has been mentioned in some of the narratives ascribed to the Prophet (pbuh) is actually only the result or corollary of the prohibition of taking Riba – and not a real and basic prohibition.
This concept needs to be understood in a little more detail:
As is clear from various verses of the Qur’an, the real prohibition of the Shari`ah applies to taking Riba. The Qur’an, at even a single instance, has not mentioned the prohibition of giving Riba. The reason is quite simple: the real moral crime, the injustice and the exploitation, according to the Qur’an, lies in taking or devouring Riba not in giving Riba. Thus, the basic initial emphasis of the Qur’an and the state of Medinah, under the leadership of the Prophet (pbuh) was to abolish the practice of charging Riba, not of giving Riba. Throughout this time, the Qur’an condemned those who charged Riba, it admonished them and reminded them of the punishment that they shall be faced with on the day of judgment for charging Riba, and then finally it gave them the ultimatum that if they do not restrain from charging Riba, the Islamic state – under the leadership of the Prophet (pbuh) – shall declare a war against them (Al-Baqarah 2: 279). During all this time, not a single verse admonished those who paid Riba, they were not threatened with any dire consequences of their act and were never directed by the Prophet (pbuh) to avoid the payment of Riba. On the contrary, the Qur’an actually directed the lenders to deal with them in a soft manner: it directed the lender to give the borrower some time to return the lender’s principal amount, if he was not in a position to do so immediately. It further advised them that if it be possible for them, they should even waive this principal amount as alms and get their rewards for this generous act in the hereafter.
Later on, when the institution of charging Riba was completely abolished and no individual who charged Riba was allowed to operate in the society, it was then that the Prophet (pbuh) declared that (when the society is completely cleared from the evil) even those who offer to pay Riba to secure loans for themselves or who silently accept paying Riba and do not bring it to the notice of the state authorities and those who are scribes of and witnesses to the documentations for Riba-based transactions without bringing such transactions to the notice of the state are accomplices to the crime and therefore deserve to be punished for their acts.
As is quite clear from the above, the real sin and crime, according to the Qur’an and the life of the Prophet (pbuh) lies in taking or charging Riba. Agreeing to give Riba becomes a crime when the society is completely cleared from this evil and taking Riba is considered a punishable crime at the state level.
In view of the above explanation, it should be clear that the prohibition of Riba at the state level should primarily entail:
- prohibiting its citizens and the institutions operating within the country from charging “Riba”, from any other individuals whether residing inside or outside the jurisdiction of the state, on any financial transactions;
- prohibiting its citizens and the institutions operating within the country from charging “Riba”, from any other institutions whether operating inside or outside the jurisdiction of the state, on any financial transactions;
- refraining itself from charging “Riba” from any individuals whether residing inside or outside the jurisdiction of the state, on any financial transactions;
- refraining itself from charging “Riba” from any institutions whether operating inside or outside the jurisdiction of the state, on any financial transactions;
- refraining itself from charging “Riba” from any other countries on any loans or aids advanced to them;
- to promulgate and implement laws for the punishment of its citizens and the institutions operating within the jurisdiction of the state that do not abide by the above prohibitions;
- to promulgate and implement laws for the punishment of such of its citizens and institutions operating within the jurisdiction of the state who agree to pay “Riba” to other citizens and institutions operating within the state on any financial transactions and avoiding to bring such activities in the notice of the state, by considering such citizens and institutions accomplices to the crime;
- to promulgate and implement laws for the punishment of such of its citizens and institutions operating within the jurisdiction of the state who act as scribes of or witnesses to a Riba-based financial contract and avoid to bring such contract in the notice of the state, by considering such citizens and institutions accomplices to the crime;
Payment of “Riba” on loans secured from individuals and institutions operating outside the jurisdiction of the state cannot be brought under the scope of any legislation passed for the prohibition of “Riba” in Pakistan.
The governments of the state of Pakistan should obviously be advised to do their utmost in securing “Riba” free loans. But as the saying goes: “beggars cannot be choosers”, if such arrangement is not possible payment of “Riba” shall be made and the contracts fulfilled, without effecting any of the above mentioned points of the proposed prohibition of “Riba” within the state of Pakistan.