Muslim World League’s Decision Regarding Riba

“The Board of the Fiqh Academy in its ninth session held at the headquarters of the Muslim World League in Makkah in the period from Saturday 12 Rajab 1406 AH till Saturday 19 Rajab 1406 AH, discussed the spread of banks dealing in Riba and the lack of alternative banks- an issue that has been referred to the board by the Secretary General. The board listened to the opinions of the members concerning this important issue that involves committing a sin prohibited by the Qur’an, the Sunnah and the consensus of jurists or ‘ijma`, and came to the conclusion that it is one of the seven grave sins. The Glorious Qur’an threatens those who deal in Riba with a war from Him and His Prophet (peace and blessings be upon him), “O You who believe! Observe your duty to Allah and give up what remains (due to you) from usury if you are (in truth) believes. And if you do not, then be warned of war (against you) from Allah and His messenger. And if you repent, then you have your principal (without interest). Wrong not and you shall not be wronged.” (Al-Baqarah: 278-279).

The Prophet (peace and blessings be upon him), says: “The acceptor of interest, its payer, the one who records it, and the two witnesses are cursed, and he said: they are all equal.” (Reported by Muslim).

Ibn `Abbas reports that the Prophet (peace and blessings be upon him) said: “Whenever Riba and adultery appear in a country then its people have brought the punishment of Allah unto themselves.” (Ahmad bn Hambal)

Recent economic researches have proved that Riba is a threat on the world’s economy, policies, morals and safety, and that it is the cause of a lot of crisis from which the world has suffered. There is no way of solving such a problem except eradicating this malignant disease which is Riba – a thing that Islam has done fourteen centuries ago. One of Allah’s Graces is that Muslims have started to regain confidence in themselves and awareness of their identity as a result of becoming well aware of the principles of their religion. Consequently, the ideas that represented the phase of psychological defeat before the Western civilization and its capitalist system, which have found supporters who tried to misinterpret clear texts in order to make what Allah and His Prophet have prohibited seem permissible to people, have all retreated.

We have witnessed a lot of conferences and symposiums held in Muslim countries and outside the Muslim world in which it has been unanimously stated that usurious interest is haram and has been proved that there are other alternative banks that conform to the sharia.

Then came the practical step which is establishing Islamic banks that do not deal in Riba or in any prohibited transaction. These Islamic banks started on a small scale but their number in both Muslim and non-Muslim states has now reached 90 banks. This certainly refuted the allegations of secularists and the victims of the cultural invasion that the implementation of the Sahri`ah in the economic field is impossible because there is no economy without banks and there are no banks without interests. Some Muslim states such as Pakistan, by the help of Allah, have turned their national banks into Islamic banks that do not deal in Riba in any way, and they have also demanded foreign banks to modify their system according to the Islamic economic system of the state or else they will have to close down. This is a good practice that Allah will reward them for.

Therefore, the board has reached the following decisions:
Firstly: All Muslims have to abstain from dealing in Riba or facilitating the receiving or giving of Riba in any way in order to avert Allah’s Punishment and the war from Allah and His Prophet.

Secondly: The board approves and is quite satisfied with the Islamic banks which are the Islamically approved alternative to interest-dealing banks. Islamic banks are banks in which the charter of incorporation states the bank’s commitment to the implementation of the Islamic sharia in all its transactions and commits its administration to having a binding lawful supervision. The board calls on all Muslims allover the world to support these banks and not to listen to the evil rumors that try to distort their image. The board sees the necessity of expanding the establishment of these banks all over the Muslim world and wherever Muslims are so that these banks would be a strong network that would pave the way for a comprehensive Islamic system.

Thirdly: It is haram for any Muslim to deal with interest-dealing banks as long as he can deal with an Islamic bank. A Muslim should replace what is bad with what is good, and to be satisfied with what is halal and abstain from all that is haram.

Fourthly: The board calls on officials in Muslim countries and on managers of interest-dealing banks in these countries to seriously take up the initiative of purifying these banks of Riba in response to Allah’s Call: “And give up what remains (due to you) from usury if ye are (in truth) believers.” (Al-Baqarah: 278) In such a way, they will contribute to the liberation of their societies from the legal and economic impacts of colonization.

Fifthly: Money that has been gained through usurious interest is Haram. A Muslim should not spend it on himself or on anyone he provides for; it should be spent on public interest such as building hospitals, schools etc. In such a case, it will not be considered alms but it would rather be deemed a means of purifying one’s money from a prohibited thing.

Moreover, it is impermissible to leave such interest to banks because they will get stronger with this money in their possession; they usually use such money in funding Christian and Jewish missionary institutions. In this way, Muslims’ money becomes a weapon against Muslims and a means of impairing their faith. It is also impermissible to continue dealing with these banks whether in return for interest or not.

The board also calls on managers of Islamic banks to recruit good Muslims and to be well aware of the principles and regulations of Islam so that all their transactions would be in accordance with Islam.
It is Allah Who grants success. Peace and blessings be upon our Prophet Muhammad, his kith and kin and his Companions, and all praise and thanks are due to Allah, Lord of the worlds.”