Riba (interest, usury) and Modern Banking System


Now let us come to point, usury. taking usury is a terrible sin which can lead a person to hell. Terrible warning is issued from God almighty. For example, God does not say if you do not do obligatory fasting during Ramadan you have to go to hell. So we can understand the severity and consequence of taking usury.

[The Koran 2:275]  Those who charge usury are in the same position as those controlled by the devil’s influence. This is because they claim that usury is the same as commerce. However, GOD permits commerce, and prohibits usury. Thus, whoever heeds this commandment from his Lord, and refrains from usury, he may keep his past earnings, and his judgment rests with GOD. As for those who persist in usury, they incur Hell, wherein they abide forever.

Let us see other verses regarding usury as we must explain usury issue by using only the holy Koran(self explanatory Book)

“[2:276] GOD condemns usury, and blesses charities. GOD dislikes every disbeliever, guilty.”

[2:278-280]  O you who believe, you shall observe GOD and refrain from all kinds of usury, if you are believers. If you do not, then expect a war from GOD and His messenger. But if you repent, you may keep your capitals, without inflicting injustice, or incurring injustice. If the debtor is unable to pay, wait for a better time. If you give up the loan as a charity, it would be better for you, if you only knew.”

God explains what usury is in the following verse:

“[The Noble Quran 3:130] O you who believe! do not devour usury, making it double and redouble, and be careful of (your duty to) Allah, that you may be successful.”

As per the verse 3:130 we can not take interest which could make our capital double. This may be the explanation of usury. As our existing banking system interest is calculated yearly basis(maybe around 5 to 14% depending upon the scheme, inflation rate, countries etc.), if anybody deposits say 100 dollars and next year if his balance becomes 200 dollars that excess 100 dollars is obviously usury and hence totally forbidden.

This type of obvious usury is existed (obviously government is not involved but government must punish those usury-takers) many village areas for example in Bangladesh. But I know at least any bank in Bangladesh(and I think in Pakistan or other countries) no such huge interest system exists in modern time.

So there is no harm to deposit our money in any state-controlled bank and enjoy the benefit(interest). The aim of any state-controlled bank is always for overall betterment of the people of the country and not for any specific person.

Due to usury-free banking system in western world you can see relatively small percentage of poor people there, on the other hand though those mullahs crying day and night about their so-called Islam based on the Koran, Hadiths, Isma, Kias etc. etc. so much poor people are leading miserable lives in their countries. They reject the Holy Koran so devil engulfs them, so they can not understand.

Mullahs are making even more money in the name of Islamic Bank in many so-called Islamic countries, cheating the common people in the name of Islam. Their definition of usury is their so called authentic hadiths and never the Quran. They make prophet Muhammad as their idol(law giver) besides God almighty.

The holy Quran always wants to protect the interest of poor, needy orphan(less privileged people in the society). That is why God almighty commands us never try to exploit those people to make money.

On the other hand modern banking system always tries to protect national economy for the betterment of all the people of any nation. Not anybody’s personal interest at all.

For instance, if inflation gets very high central bank at some point has to increase interest rate to curb the inflation to stabilize the prices. On the other hand if the national growth rate becomes very slow or even negative central bank at some point has to cut the interest rate to create more friendly investment environment to accelerate the national economy.

If economy growths too fast which could cause  again inflation then central bank at some point has to increase interest rate to curb the inflation. It is an wonderful monetary policy for all the people of a country.

All those actions are being done by any modern country’s central bank/finance ministry or whatsoever for the betterment of the country’s economy leading to fighting poverty.

Therefore this modern banking system is doing absolutely nothing against the holy Quran rather than modern banking system is very much pro-Quranic.

However, I am not generalizing all nations’ economic and banking policy in the world. But I am saying economic policy of leading countries in the world for example, USA , UK , European union etc.

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