Riba

Stipulation of Excess in Understanding and Misunderstanding Riba: The Al-Jassas Link(

Dr. Mohammad Omar Farooq

Associate Professor of Economics and Finance

Upper Iowa University

August 2006

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For citation, please use the published version from Arab Law Quarterly, December 2007]

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Email: farooqm@globalwebpost.com

Homepage: http://www.globalwebpost.com/farooqm

I. Introduction

Islamic banking and finance movement is based on the traditional position that interest is riba. Since riba is categorically prohibited in the Qur’an, it is argued therefore that interest in prohibited. Gradually, the prohibition of interest has evolved into an orthodox position, even though there is no ijma (consensus) on this. One of the essential conditions in the orthodox definition of riba is stipulated excess in a loan. That this is an essential condition of defining riba is traced to Abu Bakr al-Jassas (d. 370 AD/981 AH). Understanding this issue of stipulated excess is critical to understanding riba. In this essay, the issue of stipulated excess in connection with al-Jassas as well as its implication for defining riba and prohibition of interest is discussed.

II. Riba in the Qur'an: Pre-Jassas Understanding

Islam's position regarding justice is unequivocal and universal. It sets the highest standard in this regard. 

O ye who believe! stand out firmly for justice, as witnesses to Allah, even as against yourselves, or your parents, or your kin, and whether it be (against) rich or poor: for Allah can best protect both. Follow not the lusts (of your hearts), lest ye swerve, and if ye distort (justice) or decline to do justice, verily Allah is well-acquainted with all that ye do. [4/an-Nisa/135]

While the Qur'anic message of justice and egalitarianism is categorically on the side of protecting the weak and vulnerable, the entire notion of justice...