Glimpses of Certain Aspects of Islam by Nasim.A.Jafarey

Glimpses of Certain Aspects of Islam by Nasim.A.Jafarey

21. Ijtihad, Ijma on Riba Needed

It seems that a major storm is brewing which could soon engulf the entire financial administration of this country. The first clap of thunder has come from the Federal Shariat Court which has declared 22 laws relating to economic management as un-Islamic and hence void.

The initial reaction to the Shariat Court's judgement was a reported statement from the Federal Finance Minister that the government would appeal against this judgement in the Supreme Court. Simultaneously, the religious lobby, headed by another federal minister, came out with a strong plea that the government should not appeal against the Shariat Court judgement but instead implement it in full immediately.

After a few day’s silence, the Finance Minister came out with the assertion that he was misreported in his earlier statement, and what he had said was that the government if necessary might seek clarification or extension of time from the Supreme Court. At the same time he announced that with the exception of two of the 22 laws declared void by the Shariat Court, action was being taken to amend all the other laws in conformity with the judgement.

The most significant part of the pronouncements made Ravenfields by the Finance Minister (one can only hope that he has not been misreported again) was, however was the statement that "unfortunately there was no universally acceptable definition of ‘Riba’ in the Muslim world." This is undoubtedly the crux of the whole matter, but what is really amazing is that a government should be undertaking the amendment of some of its most sensitive financial laws to make them conform to a concept, when, as is admitted, there is Builder no universally acceptable definition of that concept. This ambivalent attitude is typical of the manner in which all governments in Pakistan have handled the question of ÔRibaÕ during the last 40 years.

Be it as it may, there is no getting away from the fact that a definition of ÔRibaÕ acceptable to the end Muslim Ummah has to be found. The fact that ÔRibaÕ is totally prohibited in Islam is above all controversy considering that, Allah has given a warning in the Quran that any one who is not prepared to give up the practice of ÔRibaÕ should prepare himself for war with Allah. There could not be a prohibition in stronger terms, but while all Muslims accept the prohibition the controversy about the essence, nature and parameters of what has been prohibited by the Quran in prohibiting Riba remains.

Leaving aside the finer points of the controversy involved in the interpretation of Riba, the two broad lines of interpretation which have given rise to the controversy are quite clear. On one side there is, for want of a better word, the conservative group, which takes its stand on the sweeping proposition that all forms of interest are the same as ‘Riba’ and therefore, totally forbidden for Muslims. This group has not only the strength of numbers but can also produce hundreds of Fatwas by Ulema to support its stand. It is not concerned with the fact that at the time of the revelation of the Quran, the present form of bank interest was not known anywhere in the world.

The other group which again for want of a more suitable term, may be called the liberal group, has grave doubts about the blind equation of ‘Riba’ with all forms of interest. This group which has, broadly speaking, the support of the educated classes, contends that what the Quran prohibits in such strong terms is a specific practice prevalent in the days of ‘Jaheliya’ in Arabia, and that is why wherever the word Riba occurs in the Quran it is preceded by the letters ‘Al’, meaning ‘the’, thus confining the meaning of the word ‘Riba’ to a specific practice of those times.

According to Zaid bin Aslam, this practice was that if a borrower failed to settle his account on time and sought extension in the stipulated period of repayment, he was granted a moratorium on the condition that he agrees to the payment of a penalty which was generally of an extortionate nature.

From the above brief recording of the views of the two contending groups it would be seen that the contention is as to what constitutes the essence, the most important aspect of the practice of Riba. For the the conservative group the only thing which matters Software is an increase in the amount of the principal, while for the liberal group the most important aspect of ‘Riba’ is the exploitation by one party of the helplessness of the other party in a transaction.

It may also be pointed out that the word ‘Riba’ has been used in numerous senses in classical Islamic literature, and one not so well known example of ‘Riba’ relates to land tenure. According to Abu Dawood on the authority of Jaabir bin Abdullah, the sharing of the produce of a piece of land, let out to someone on that very condition, (present day zamindari system) amounts to Riba.

From what has been stated above it should be fairly clear that neither the exact meaning of the term ‘Al_Riba’ nor its application in the present-day economic conditions is so clear and free from doubt that there can be no bonafide controversy among well-meaning Muslims about these matters. It is a great pity and perhaps also one of the causes of the present-day plight of the Muslim Ummah, that we have failed to face the issues squarely and to find a solution on the basis of consultation and consensus among the Muslims. Instead of following this proper course we have either tried to brush the issue under the carpet or to indulge in various forms of hila and hypocrisy which can lead us nowhere except towards disaster.

One topical example of the way we are courting disaster is our failure to attract foreign investment from non_Pakistani, non_Muslim investors from across the world, inspite of the very liberal concessions that our government has offered to them and the much publicized recently held International Investment Conference. Apart from many other factors, a major factor which makes non_Muslim foreign investors hesitate so much in coming forward is the uncertainty about the economic and financial system in this country, in the years to come, centred round the meaning and application of ‘Al_Riba.’

Where then do we go from here? Shall we continue to flounder in a morass of hypocrisy and uncertainty as we have been doing for the last so many years, or would we have the courage of our convictions to face the issue squarely and find a solution that is both in accordance with Islamic traditions and one which would put an end to this confusion and unnecessary controversy. The classical and totally non-controversial method for finding the correct interpretation of religious injunctions is Ijtihad and Ijma. Ijtihad is the presentation of a solution by an individual and Ijma is the acceptance of that solution by the entire Muslim Ummah.

Although the validity of this procedure for settling all doubts is beyond question, we have allowed this procedure to Course fall into disuse by not properly institutionalising the Ijtihad and Ijma methodology. The only way in which we can get out of the morass in which we have landed ourselves by fanning this controversy about ‘Al_Riba’ is by first making institutional arrangements for Ijtihad and Ijma, and then referring the entire question of the meaning and application of ‘Al-Riba’ to this institution for final interpretation.

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22. Islam & Democratic Institutions

Index

Home Page

Preface

1. Theory & Practice of Islamic Socialism

2. Islamic Economic System

3. Islamic Financing

4. Quranic Commandments about Justice

5. The Quranic View-point about Tolerance

6. Interest on Production Loans : A case for Ijtihad

7. Moral Re-armament