Riba and

Bank Interest
Muhammad Akhyar Adnan
Department of Accounting
Faculty of Economics and Business
UMY

1
 Pengertian Riba
 Riba = az-ziyadah [addition]
 Riba also means “grow”, “developing”
and “Purication”
 Technical understanding: taking any
additional part of loan unfairly / unjustly
in any transactions
 Loan / lending
 Purchasing / buying / selling

2
 Jenis Riba
 In one of hadith it is said that there are 73
branches / level of riba
 In fiqh studies, there are 4 types of riba:
 Riba Qardh: any addition charged to the debtor
 Riba Jahiliyyah: Loan that should be paid more than
an original loan due to timem or debtor should pay
more because the debtor cannot pay timely
 Riba Fadhl: an exhange of goods which are not equal
in quantity or quality.
 Riba Nasiah: the postponent of delivering / receiving
goods due to different quality or due or additional
period

3
 Types of Ribawi Goods

Gold and silver, either in the

form currency or others
Staple foods: rice, corn,
wheat, fruits

4
 The “Interest” from other
religions’ perspective
 Jews
 Exodus articles 22 and 25
 Deuteronomy articles 23, verse 19
 Leviticus articles 35 verse 7
 Greek and Romans
 Plato (427 – 347 BC)
 Aristotle (384 – 322 BC)
 Cato (234 – 149 BC)
 Cicero (106 – 43 BC)

5
 The “Interest” from other
religions’ perspective

 Christian
 Lucas 6:34-5
 Early view of Christian Pastors
 View of Christian Scholars (Century XII-XVI)
 View of Christioan Reformists (Century XVI –
1836)

6
 Prohibitions of Riba in the
Holy Qur’an
 Firstphase: QS Ar-Rum 39
 Second phase: QS An-Nisa 160-1
 Thirsd phase: QS Ali-Imran 130
 Fourth phase: QS Al-Baqarah 278-279
 The frequences of riba in the Quran
 The frequences of other prohibited
products item: pork, blood, carcass,
alcoholic drinks and so forth
7
 Prohibitions of Riba in the
Ahadith
 HR Bukhari No. 2084, kitab Al-Buyu’
 HR Bukhari No. 2145, kitab Al-Wakalah
 HR Bukhari No. 2034, kitab Al-Buyu’
 HR Muslim No. 2971, kitab Al-Masaqah
 HR Bukhari No.6525, kitab At-Ta’bir
 HR Muslim No. 2995, kitab Al-Masaqah

8
 interest and Riba
 In the world / global level all agree that:
interest = riba = haram
 Transformation in Indonesia,
 interest is halal, as long as it is applied for productive
activities
 Interest is a grey area (mutasyabihat). It is allowed
only in the States banking
 interest = riba = haram (prohibited)
 The newst Fatwa of MUI : interest = riba =
haram, except for those who are living in very
remote areas and have no acces to Islamic
banking
9
 Discourse of Riba and interest
 “Light” different between Riba and Buying /
Selling; Analogue to:
 The prohibition of pork and halal meats
 A different between legal marriage and adultery
 The human logic some how is not adequate to
understand the the Islamic law fully. The faith /
iman is really needed.
 The interest / important of obeying Isamic law
is not for Allah, but it is for the sake of
humanbeings themselves.
 Riba / interest will NOT make someone rich;
Zakat / Sodaqoh will NOT make someone poor.

10
 Interest, Riba & Economy
 The existence of unfairmess in usurious / ribawi
economy
 Pre-determined rate
 Potentially increase doubled tripled and so forth. It
will burden one party
 Dichotomy of strong Vs weak parties.
 Riba might trigger someone to be lazy and not
creative.
 Create the distance between the Rich and the
Poor
 It reduces the investment intentions / potentials

11
 Interest, Riba & Economy
 The issue of riba / interest is so clear,
either in:
 Al-Qur’an
 Ahadith
 The recent Fatwa of MUI
 The decision are returned back to all
Muslims, whether they want to partial
Muslim, or a full Muslim.
 See again: QS Al-Baqarah 208.
12