Chapter on Ribā (usury) and Ṣarf (currency exchange)

Linguistically, ribā means “increase.” Allah the Exalted says, “When We send down water upon it, it quivers and swells” (Q 22:5), that is, it grows.

In the Sacred Law ribā is “an increase occurring in specific items.” It is forbidden by the Qur’an, the Sunnah, the consensus of the Muslim community, and sound legal analogy.
• Scriptural evidence includes Allah’s statement, “He has prohibited ribā” (Q 2:275).
• The Prophetic Sunnah includes the ḥadith in which the Prophet ﷺ “cursed the one who consumes ribā, the one who pays it, the two who witness it, and the one who records it”—a report agreed upon by al-Bukhārī and Muslim.
• The entire ummah has unanimously agreed on the general prohibition of ribā ⦗1⦘, relying on these texts.

Its prohibition is likewise demanded by justice and analogy, for dealing in ribā is outright injustice—or at the very least a gateway to it. The created order can stand only upon the justice that the Lord has obligated for Himself and imposed upon His creatures. The harms and social ills arising from ribā are beyond counting.
Among them: the artificial inflation of wealth by illegitimate means, for such growth comes at the expense of stripping the poor of their property and adding it to the coffers of the rich. That alone is a lethal disease in human societies, breeding disputes and enmity. Ribā also undermines industry, honest labor, the cultivation of land, and the extraction of its wholesome produce.

Nowadays we witness financial dealings in banks and postal savings funds where people have dared to engage in ribā, disguising it under other names. This fulfills the noble prophetic saying, “A time will come upon people when they will drink wine and call it by another name.”

A full exposition of these matters and their refutation is found in works other than this one.

As for ṣarf, its root sense revolves around change and transformation. Lisān al-ʿArab states: “Ṣarf is the sale of gold for silver and vice versa, for in it one transfers value from one substance to another.” In other words, it is the exchange of one form of money for another.

Hadith 1

ʿUmar ibn al-Khaṭṭāb (may Allah be pleased with him) reported that the Messenger of Allah ﷺ said:

“Gold for gold is ribā unless it is hand-to-hand; silver for silver is ribā unless it is hand-to-hand; wheat for wheat is ribā unless it is hand-to-hand; and barley for barley is ribā unless it is hand-to-hand.”