What kind of Riba is prohibited ?

The question is which kind of Riba is prohibited?

The word Riba in Arabic literally means increase, gain or profit on money loaned.

No where in Quran Riba is prohibited.

The word used in Quran is Al-Riba (2:275). This is a proper noun pointing out to something not just riba. The question is which form of riba is then partcularized as Al-riba.

If Quran is to be read with reference to the context then we must find out as to what are the circumstance under which increase, gain or profit on money loaned is prohibited?

To find out the context of Al-Riba Let us examine a couple of verses before and after the occurance of world Al-Riba in verse 2:275.

Reading verse 2:272 to 2:280 we find that the issue discussed in these verses is, helping the poor deserving charity.

Explaining how to help a poor, Allah says " help them by way of charity or give them loan and charge no usury. Again Allah Says: Such people may not be able to pay back the loan in time. If so, give them more time or remit the loan as charity. The debtor being discussed here is the poor deserving charity. (2/272-280) and certainilly not an enterpriser.

Amazingly, every where in Quran, Al-Riba is contrasted with Charity. This obviously means that Al-Riba is prohibited only where giving charity is called for.

Surprisingly again, the Qur'an nowhere condemns the giver of usury.This perhaps is because the givers of usury are the poor exploited to accept loans with usury.

All these facts put together are sufficient to prove that Quran prohibits charging of interest from the poor deserving charity.

An increase, gain or profit on commercial loans aimed at inflating resources is trading which Allah has excluded from the purview of Al-Riba.

This is what I think. I would be obliged if I am corrected.

Muhammad Latif Chaudhery
Student of Quran
Lahore, Pakistan
March 9, 2009