The Islamic Critique of Interest

Paul S. Mills and John R. Presley
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Paul S. Mills: HM Treasury
John R. Presley: University of Loughborough

Chapter 2 in Islamic Finance: Theory and Practice, 1999, pp 7-14 from Palgrave Macmillan

Abstract: Abstract The Qu’ran disparages the taking of interest (riba) in four distinct passages which increase in severity, the later the claim of revelation. Initially, interest is simply described as not counting as true wealth in God’s eyes (30:39). The Jews are condemned for not obeying their own Scripture’s prohibition of interest1 (4:161) and reference is made to the contemporary practice of compounding interest and principal upon default: O believers, take not doubled and redoubled interest, and fear God so that you may prosper. Fear the fire which has been prepared for those who reject the faith … (3:130–1)2 The final condemnation is the most outspoken and wide-ranging: Those who benefit from interest shall be raised like those who have been driven to madness by the touch of the Devil; this is because they say: ‘Trade is like interest’. But God has permitted trade and forbidden interest. Hence those who have received the admonition from their Lord and desist, may have what has already passed, their case being entrusted to God; but those who revert shall be the inhabitants of the fire and abide therein forever. … O believers, fear God, and give up the interest that remains outstanding if you are believers. If you do not do so, then be sure of being at war with God and His Messenger. But, if you repent, you can have your principal. (2:275, 278, 279)

Keywords: Ethical Critique; Islamic Finance; Unearned Income; Mainstream Theory; Legal Exchange (search for similar items in EconPapers)
Date: 1999
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DOI: 10.1057/9780230288478_2

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