In the following pages an attempt is made to raise some questions on the operation of an economy without 'Riba' (interest or usury), after citing the directly relevant varses (ayats) from the Qur'an. It is expected that in the course of the discussion in the seminar, some progress will be made towards obtaining answers to them.

"O ye who believe I Devour not usury, Doubled and multipled. But fear God; that Ye may (really) prosper. (Al-lmran, Verse 130.)

"Fear the Fire which is prepared for those who reject Faith." (Verse 131.)

The above two ayats are the first to be revealed regarding usury.

"And they took usury, Though they were forbidden; And that they devoured Men's substance wrongfully; We have prepared for those Among them Who reject Faith A grievous punishment." (Niasa,161.)

"But those among them who are well grounded in knowledge, And the Believers, Believe in what hath been Revealed before thee : 'And (especially) those who estblish regular prayer and practise regular charity And believe in God And in the Last Day :To them shall We soon Gjve a great reward. (Nisaa, 162.)

"Nay, the wrong-doers (merely) Follow their own lusts, Being devoid of knowledge. But he Will guide those Whom God leaves astray ? To them the|e will be No helpers." (Rum, 29;),

"God will deprive Usury of All blessing. But will give increase For deeds of charity : For He loveth not Creatures ungrateful And Wicked." (Baqarah, 276.)

"Those who believe, And do deeds of riteousness. And establish regular prayers And regular charity. Will have their reward with their Lord : On them shall be no fear. Nor shall they grieve." (Ba-qarah, 277).

"0 ye who believe ! Fear God, and give up what remains of your demand For usury, if y« are indeed believers." (Baqarah, 278.)

"If ye do it not. Take notice of war From God and his Apostle; But If ye turn back, Ye shall have Your capital sums : Deal not unjustly, And ye shall not Be dealt with unjustly." (Baqarah, 279.)

"If the debtor is in a difficulty. Grant him Time Till it is easy For him to repay. But if ye remit it By wayof charity, That is bestfor you. If ye only knew." (Baqarah, 280.)

"And fear the Day When ye shall be Brought back to God. Then shall every sou I Be paid what it earned. And none shall be Dealt with unjustly." (Baqaiah, 281).

"0 ye who believe ! When ye deal with each other. In transactions involving Future obligations In a fixed period of time. Reduce them to writing. Let a scribe write down Faithfully as between The parties : Let not tho scribe Refuse to write: as God Has taught him, So let him write. Let him who incurs The liability dictate. But let him fear His Loid God, And not diminish aught of what he owes. If the party liable is mentally deficient. Or weak, or unable himself to dictate; Let the guardian Dictate faithfully. And get two witnesses, Out of your own men, And if there are not two men. Then a man and two women, Such as ye choose. For witnesses, so that if one of them errs the other can remind her. The witnesses Should not refuse whon they are called on (For evidence). Disdain not to reduce To writing (your contract) For a future period, Whether it be small Or big: it is juster In the sight of God, More suitable as evidence, The more convenient To prevent doubts among yourselves. But if it be a transaction Which ye carry out On the spot among yourselves,There is no blame on you if ye reduce it not To writing. But take witnesses Whenever ye make A commercial contract; And let neither scribe Nor witness suffer harm. If ye do (such harm), It would be wickedness In you. So fear God; For it is God That teaches ycu. And God is well-acquainted with all things." (Baqatah, 282.)

The Sura Baqarah ayats are the last to be revealed in connection with usury. In all, the above twelve ayats are the ones revealed in connection with the subject.

It will be noticed that the practice of usury (Riba) is mentioned in all these places with reference to the taking usury (or interest). The aspect of the personal appropriation of usury (or interest) thus comes out very prominently in the Qur'an.

It would appear, therefore, that there is seme objective behind the dictate of the Qur'an to avoid taking usury, (or interest or compound interest as may be interpreted). The objective seems to be the avoidance of exploitation of man by man. This assertion is confirmed if we take into consideration the spirit of many ayats of the Holy Qur'an, apart from many of the ahadith. It would seem, therefore, that exploitation is disapproved of in Islam, be it through interest or byany other means. Exorbitant rates of profit, too low levels of wages and many other mechanisms that may be used for the purpose of exploitation would seem to be equally obnoxious to the followers of Islam. It may further be stated that the dictates of the Qur'an are to be followed by the followers of Islam both in letter and in spirit. It seems that only in an Islamic society can these dictates be adequately followed.

If this is so, it becomes incumbent on the part of the Muslims to establish such a society in which these dictates can be followed. Otherwise, in an environment of allround Un-lslamic activities, it is hardly possible to follow these dictates, particularly when the overall set up is not Islamic. Islam, it is needless to say, is something to be adopted in a society as a whole and not piecemeal. Efforts to adopt Istempiecemeal creates problems of such a nature that particular dictates of Islam can hardly be followed in letter and spirit. That is why I like to contend that the establishment of an Islamic society is a pre-requisite for the proper opertion of banking without interest or usury—Riba. The mere establishment of a banking system that operates on the basisof Mudarabah (profit sharing) in place of interest may thus not bean adequate step for the implementation of the Qur'anic dictates against  Riba as noted in the ayats noted above. This is not to say that a banking system without interest cannot be operated. It can be operated as has been shown by in stances from time to time and as has been outlined in some books and articles by some scholars in modern times. All these appear, however, to be instances of seriousness With a particular institution rather than the principle that is behind it. A similar seriousness is sometimes expressed regarding zakat without an adequate attention being given to the principle of it. Such an institutional apprcach to the Qur'anic dictates seems inadequate. Banking in the modern World is practised on the basis of interest, which is defined as "that percentage return per year which has to be on any safe loan of money" (Samuelson, P.A. Economics, Tenth Edition (International), Tokyo, 1976, p. 601). Riba as mentioned in the Qur'an is also a variant of interest, although, historically speaking, there were two kinds of riba, namely Riba-al-Jaluliya (comparable to compound interest) and Riba-al-Sunnah (riba on the six commodities, namely, gold, silver wheat, barley, dates and salt). These latter are not mentioned in the Qur'an but are clearly mentioned in the Hadith. Imam Fakhruddin Razi calls the former Riba-al-Nasia and the latter Riba-al-Fadl. The translation of the term Riba both as interest and as usury is current. It is generally  accepted that Riba is prohibited and that banking on the basis of interest cannot, therefore, be considered to hava the approval of shariah. Exceptions to  this view have not gained much popularity.

It may be noted, however, that at least some accounting price vof capital sums is bound to arise if a capital market exists or if the allocation of capital as a resource is to be made on some basis Profit and loss sharing after the accrual of the product of capital would be distinct from interest and would possibly face no question from the point of view of Shariah. Whether such a practice would ensure an efficient operation of the capital market or would further complicate it on account of the possiblity of dishonestyand other disturbing phenomena seems to be a relevant question.

If we take the case from the other angle of vision, namely that of the borrower, inflation and deflation may also create further disturbances. For example, we may take the case of Qarz-i- Hasanah (loan without interest). In the modern world, inflation is quite common. While we had an inflation of 15% in Bangladesh during the past one year, there was an inflation of over 13% in the USA during the period. A lender on the basis of Qarz-i-Hasanah would lose substantially by taking the same amount after a year in such a case. The question may, therefore, be asked whether we should allow the use of the price-level index for deciding upon the amount by which to repay. This indexing can be done in various ways; but the decision to make first is whether it is to be considered permissible according to Shariah.

Again, if the personal appropriation ('devouring') of interest is the matter for our concern, what about the case in which there is no such appropriation, for example in a fully socialistic society where the earning of banks does not accrue to any idividual personally? Can it be viewed as permissible? It seems that any progress towards an answer to such questions would require a combination of religious literature with social science research.

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References

1. Abdullah Yusuf Ali :  The translation of the Holy Quran, Lahore, 1934.
2. Ziauddin Ahmad : The Qur'anic Theory of Riba, The Islamic Quarterly, London, Vol. 22, Nos. 1 & 2, January-June 1978.
3. Afzalur Rahman : The Economics of Islam, 3 Vols.
4. M. Uzair : Interestless Banking.
5. Nejatullah Siddiqui : Banking without Interest.