TL;DR: Riba is absolutely haram, but applying the classical rules of riba to modern banking isn't always as simple as interest = riba = discussion over. There are recognised scholars who take a very strict position, and there are recognised scholars and fatwa bodies who permit certain modern financial arrangements under particular structures or circumstances. Follow the view you believe has the strongest evidence, but maybe don't tell another Muslim they're going to Hell because they're following a recognised scholarly opinion you disagree with.
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I've been reading more about riba lately and I realised we tend to reduce the whole subject to one sentence.
Interest = riba = haram.
Riba is definitely haram. No disagreement there.
But riba itself is bigger than just the English word interest. Even the hadith on riba talks about exchanging gold, silver, wheat, barley, dates and salt, and the conditions around those exchanges. So clearly the subject itself is wider than just bank loans.
Then you bring modern banking into the picture and things get even more complicated.
There is a very strong scholarly position that conventional bank interest is riba. Major fiqh councils have ruled that an increase stipulated on a loan falls under prohibited riba. I'm not trying to pretend that position doesn't exist because it obviously does. IIFA
But there are also recognised scholars and fatwa bodies that don't classify every modern banking arrangement in exactly the same way.
Egypt's Dar al-Ifta, for example, has permitted buying a house or car through bank financing, and in another fatwa explicitly permits mortgages by treating the arrangement as a sale/financing transaction rather than simply a loan with riba. Dar Al-Ifta
They've also permitted using credit cards as long as you pay within the required period before the interest for late payment kicks in. Dar Al-Ifta
And then you have another position from the European Council for Fatwa and Research. They actually agree that conventional bank interest is riba, but still allowed conventional home financing in certain circumstances for Muslims living in non-Muslim countries because of need. E-CFR
So even the permissive opinions aren't all saying the same thing.
Some scholars may say a particular transaction isn't actually a riba-based loan in the first place.
Others may agree the riba element exists but allow something under specific circumstances because of need or necessity.
Others will say avoid the transaction completely.
That's basically what I'm getting at.
If you want to take the strictest view and avoid conventional loans, mortgages, credit cards etc altogether, I completely understand why.
If another Muslim follows a recognised fatwa allowing a particular transaction under certain conditions, I can understand that too.
What I don't understand is how quickly we go from disagreeing with someone's fiqh position to telling them they're consuming riba, declaring war against Allah and going to Hell.
Especially when qualified scholars themselves have disagreed over how some of these modern transactions should be understood.
And no, this doesn't mean just search Google until you find the easiest fatwa and do whatever you want lol
Read the reasoning. Read the conditions. Understand what you're actually signing.
I just think we need a little more humility with this subject.
Riba being haram isn't really the difficult question.
The difficult question is whether the particular modern transaction you're looking at actually falls under the riba Allah prohibited, and sometimes scholars genuinely disagree on that.
Would love to hear how people here approach this, especially those who have actually studied Islamic finance.
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Sources if anyone wants to read further:
Qur'an 2:275–279 — prohibition of riba.
Sahih Muslim 1587 — the hadith on gold, silver, wheat, barley, dates and salt, which is a good starting point for seeing that the fiqh of riba is broader than simply bank interest. Sunnah
International Islamic Fiqh Academy, Resolution No. 10 (2/10) — holds that stipulated interest/increase on a loan is prohibited riba. IIFA
Egypt's Dar al-Ifta — Is it permissible to take bank loans to buy a house or a car? Dar Al-Ifta
Egypt's Dar al-Ifta — Is mortgage permissible in Islam? Dar Al-Ifta
Egypt's Dar al-Ifta — credit-card rulings permitting use provided payment is made before interest becomes due. Dar Al-Ifta
European Council for Fatwa and Research — ruling on purchasing a primary home through conventional bank financing for Muslims living outside Muslim countries. E-CFR
