Imam Ahmad Ibn Hanbal [d. 273 AH]
Even among the classical scholars, the definition and interpretation of Riba leave significant room for difference of opinion. Imam Ahmad is regarded as the founder of one of the orthodox schools of Islamic jurisprudence. His position is that only riba al-jahiliyyah is unlawful riba in Islam.
“The Qur’an vehemently condemns riba, but provides little explanation of what that term means, beyond contrasting riba and charity and mentioning exorbitant ‘doubling.’ Commentators describe a pre-Islamic practice of extending delay to debtors in return for an increase in the principal (riba al-jahiliyyah). Since this practice is recorded as existing at the time of the revelation, it is one certain instance of what the Qur’an prohibits. Hence Ibn Hanbal, founder of the Hanbali school, declared that this practice – ‘pay or increase’ – is the only form of riba the prohibition of which is beyond any doubt.” [Vogel and Hayes, pp. 72-73, quoting Ibn Qayyim al-Jawziyya, d. 1350, I’lam al-muwaqqa’in ‘ala rabb al-‘alamin, ed. Taha ‘Abd al-Ra’uf Sa’d, Beirut: Dar al-Jil, 1973, 2:153-4]
Once again, the sweeping and blanket claim of prohibition of interest flies in the face of this position, if only Riba al-Jahiliyyah is unlawful in Islam.
Ibn Qudama [d. 1223 AD]
He was a noted Islamic scholar of the Hanbali madhhab. He opined that when a loan involves an article that is neither weighed nor measured, the creditor should get back the original value. Even though this view pertains only to articles not weighed or measured, it has ramification for the later, more general view of Imam Ibn Taymiya discussed below.
“When an article loaned is neither weighed nor measured, there is a choice between requiring the return of an equivalent at the date of repayment or requiring a return of the article’s value as at the date of the loan. Ibn Qudama held that, with objects not measured or weighed, there could be no equivalents, so the debtor had to restore to the creditor the value of the article as it was when the obligation originally arose, that is, at the time of the loan contract.* An argument could be constructed on this basis that a creditor should at least be able to recover a sum equivalent to the amount by which the original principal lent has depreciated in real terms during the period of the loan.” [W. M. Ballantyne, Commercial Law in the Arab Middle East: The Gulf States (London: Lloyds of London Press, 1986), pp. 125-6; *referring to Al-Mughni, Vol. 4, pp. 357-8]
Imam Ibn Taymiya [d. 1328 AD]
Imam Ibn Taymiya hardly needs any introduction. His view is built further on Ibn Qudama’s. According to him, the lender should be able to recover the original (or inflation-adjusted) value, which is relevant for the nominal vs. real distinction. In accordance with his view, there can’t be any blanket prohibition of interest. That is, nominal interest that includes only inflation premium would not be prohibited. In that case, it can’t be said that interest is prohibited, but positive real interest is prohibited.
“Ibn Taymiya, an independent Hanbali whose views have often been approved by legal modernists [also] … believed that the lender should recover the original value. …
It would be possible to argue with some force that Ibn Taymiya’s view is the one which ought to be adopted, because the lender is not engaging in riba – he is not making a real profit out of the transaction. If he could not recover for losses sustained as a result of inflation, he would be much less inclined to grant a gratuitous loan.” [W. M. Ballantyne, Commercial Law in the Arab Middle East: The Gulf States (London: Lloyds of London Press, 1986), pp. 125-6] [Note: This part would be updated with direct citation from the works of Ibn Taymiya]
Ebusuud Efendi, the Mufti of Istanbul between 1545 and 1574 C.E
“Perhaps the oldest such pronouncement was made by Ebusuud Efendi, the Mufti of Istanbul between 1545 and 1574 C.E., and holder of the title ‘eyhlislam towards the end of his tenure. Ebusuud defended the act of interest-taking, especially by awqāf (pious foundations), as a practical matter of necessity.1 As expected, this minority opinion, while sanctioned by the Ottoman Sultan Suleyman, was rejected by the majority of Muslim scholars around the Arab world, who continued to favor interest-free lending and traditional partnership forms of finance. Consequently, European modes of banking only became commonly practiced in the Islamic world in the eighteenth century.” [el-Gamal, 2000; online, p. 2]
Sir Sayyid Ahmad Khan [1817-1898 CE]
Sir Syed Ahmad Khan was the reformist leader of Aligarh Movement in India and the founder of Aligarh Muslim University.
“The puzzling problem that the Qur’an and the Sunna expressly prohibited Riba or any transaction involving it was solved by translating the word ‘RIBA’ as usury and differentiating it from the western concept of interest.
This was the line of thought adopted in India by Sir Syed Ahmad Khan and others of his school of thought like Nazir Ahmad, Syed Tufail Ahmad Manglori, etc. Some Egyptian Ulama like Tawfik Affendi and Sh. Islamil Khalil and the modernists of Turkey expressed identical views.” [Fazlur Rahman Gunnauri, pp. 24-25]
“… his concerns for social cohesion, social progress and social equity influenced his rejection of the hitherto standard prohibition of riba (interest) among Islamic scholars. He asserted that this prohibition should only apply to the debts of the poor who borrowed money from necessity. It should not be apply to those whose expanding commercial ventures contributed to the public good.” [Charles Tripp, Islam and the Moral Economy: The Challenge of Capitalism [Cambridge University Press, 2006, p. 26, quoting J. M. S. Baljon, The Reforms and Religious Ideas of Sir Sayyid Ahmad Khan (Lahore, 1970), pp. 34-49]
Muhammad Abduh [1849-1905] and Muhammad Rashid Rida [1865-1935]
Muhammad Abduh Rashid Rida
“It has been claimed that according to Muhammad ‘Abduh (d. 1905) who was the Grand Mufti of Egypt, and his disciple Muhammad Rashid Rida, what is prohibited is the form of riba practised in the pre-Islamic period. In his summary of ‘Abduh and Rida’s views, Nabil Saleh suggests that according to them, the first increase on a termed loan is lawful but if, at maturity date, it is decided to postpone that maturity date against a further increase, this would be prohibited. This is view is apparently based on the reports available in Tabari’s commentary in relation to how riba was practised in the pre-Islamic period. It must be noted that these scholars were not explicitly and openly suggesting that interest is acceptable without any qualification.” [Saeed, p. 43; for similar observations, also see Saleh, p. 28; El-Gamal: “Rashid Rida on Riba”].
Abdullah Saeed discusses the following based on Muhammad Rashid Rida [d. 1935], an eminent scholar and the disciple of Shaikh Muhammad Abduh.
“… [N]one of the authentic hadith attributed to the Prophet in relation to riba appears to mention the terms, ‘loan’ (qard) or ‘debt’ (dayn). This absence of any reference to loans or debts in riba-related hadith led a minority of jurists to contend that what is actually prohibited as riba is certain form of sales, which are referred to in the hadith literature.” [quoting Rida, al-Riba wa al-Mu’amalat fil al-Islam, Cairo: Maktabat al-Qahira, 1959, p. 11]
The views of Abduh is mostly known via the works of his disciple Rida. Their views were not of any blanket approval of interest. The reality is just the opposite. However, the significance of their views in this context is that they did not subscribe to any simplistic equation between riba and interest. They also approved of some form of interest.
“Regardless of Abduh’s precise intention, his ambivalence about equating all forms of interest with riba echoed some of the re-evaluation that was taking place in the Islamic world concerning the limits of legality in a changing environment.” [Tripp, op. cit., p. 127]
69 Ulama (scholars) from India and Makkah [1920s AD]
Some scholars consider only consumption loans, where a borrower might be at a disadvantage for a host of reasons and vulnerable to injustice and exploitation, are covered by the prohibition of riba. This position and the underlying argument may be questionable, but in this essay each divergent position is not being examined in detail. Instead, the fact contradicting the claim of a consensus about riba-interest equivalence is being presented.
“In India an association was formed by Syed Tufail Ahmad Manglori for promoting the custom of Usury amongst Muslims. The association also issued a paper ‘Soodmand,’ first from Aligarh (1925) and later from Budaun. It also brought out many pamphlets and booklets. A Fatwa contained in the book Tafri Abhath by Ghulam Dasgir Qusoori was also circulated with the seals of 69 Ulema of Lahore, Dera Ismail Khan, Rampur, Bahawalpur, Mecca, etc. Earlier Moulvi Insha Allah Khan in 1909 had started a discussion in favour of interest in the pages of ‘watan’. The articles were collected and published under the title of ‘Maslae-Sood aur Tijarate-Qaumi.’ Recently two articles have been published by Institute of Islamic Culture, Lahore, in its monthly organ ‘Thaqafat’ expressing the same views.
It is not without interest and significance to note that the mainstay of all the arguments of almost all these people has been that the Qur’an and Sunna prohibit Riba, which applies to Usury, i.e., the excess received by the creditor on loans lent out for consumptional purposes.” [Fazlur Rahman Gunnauri, pp. 24-25]