Dr. Hattab gained his PhD in Islamic Economics at Ummalqura University, Saudi Arabia, in 1990 following his MSc in 1986 and BSc in 1981 from the same university. His area of specialization is in Islamic Economics and Banking, with a particular focus on the fiqh of modern financial transactions. He has more than 20 years experience of teaching graduate and undergraduate levels between Jordan, Pakistan and Malaysia and Kuwait, supervising over thirty masters and doctoral theses in Islamic economics and banking and fiqh of financial transactions. Between 1993-1995 he was head of the Islamic Economics Department at the Islamic University in Pakistan; between 2005-2007 he was head of department of Islamic Economics and Banking at Yarmouk University, Jordan; 2007-2010 professor of economics at the same department; and between 2010-2012, he was Deputy of University for Academic Affairs, at Al-Madinah International University (MEDIU) in Malaysia.
He has more than fifty research papers published in peer-reviewed journals and presented to national and international conferences. In 2013 he published Daleel al-Bahitheen ila al-Iqtisaad al-Islami wal masarif al-Islamiyyiah fi al-Urdun 1974-2010 (Researchers’ Guide to Islamic Economics and Banking in Jordan 1974-2010, Washington, IIIT, 2013). He is currently (since 2012) a visiting professor at Kuwait University, College of Sharia, Kuwait.
Speech Title (Economics and Finance panel)
Riba and Interest between Islamic Jurisprudence (Fiqh) and Economics
This paper attempts to explain and clarify the concept and nature of riba with particular focus on the differences between riba and bank interest. It also explores the effects of approaching bank interest as either riba. The paper is also in an attempt to explain and support the Sharia-based rulings that relate to interest-based deals in which Muslim, especially those living in foreign countries or overseas, get engaged in. The study begins by clarifying the concept of riba, citing the opinions of Muslim jurists and Quran exegetes on the forbidden riba in the Quran and Sunna and then the legal and economic definitions of interest in order to examine if riba is identical to interest. The paper will highlight the consequences of riba in this world and in the afterlife. Reference will also be made to the views of contemporary scholars on banking interests in Muslim-majority and non-Muslim countries. The paper also examines contemporary fatawa issued for Muslims living as religious minorities where the opinions of scholars on darurah (legal necessity) and maslahah (good/welfare) are given considerable importance. The paper considers whether darurah or maslahah are valid Fiqh instruments and whether Fiqh rules may change in accordance with them. The main conclusions of this paper are as following :
- Riba and interest are identical
- Riba is, in principle, also forbidden between Muslims and non-Muslims
- Currently, there is no difference in the forbiddance of bank interest in Muslim-majority and non-Muslim countries. However, since Muslims living in non-Muslim countries may suffer abuse, discrimination and exceptional laws (different from those in Muslim-majority countries), interest-based deals may be tolerated for individuals, but only under certain conditions and in line with the regulatory rules of “hardship begets facility” ; “necessity renders prohibited things permissible” ; and “urgent need is equal to necessity in effect for both private or public use” so as to relieve Muslims from any sin and strengthen and protect them. These contracts should only exist on a temporary basis, whilst the compelling conditions are present.
Throughout history, mankind has expressed no greater consensus regarding any issue as it was the case with riba. Plato discouraged riba in his work “Laws” in the ancient times of the Greeks ; Aristotle cursed riba and those who dealt in it and he turned the phrase, “money never begets money”. By the medieval ages, Thomas Aquinas warned against riba and so did Nicholas Oresme. The church was also strict in banning riba (see, al-Masri, 1981, p. 74 ; Abu Zahra, 1970, p. 12).
The pre-Islamic Arabs were no exception to this general rule ; they were averse to accept riba and understood its ill-gotten gains. The literature of the Prophet’s biography refers to this point in the context of rebuilding of the Ka’ba after the flood had demolished it, such that the following policy was issued by the Arabs : “Do not use in the building any profit of iniquity, illicit gains from harlotry, usurious sale or injustice committed against any man” (Harun, Dar al-Fikr, undated, p.44).
God never threatened to fight against any human being except in cases of consuming usury about which He says : “O you who believe ! Be afraid of Allah and give up what remains [due to you] from riba [usury], if you are really believers. And if you do not do it, then take a notice of war from Allah and His Messenger but if you repent, you shall have your capital sums. Deal not unjustly [by asking more than your capital sums], and you shall not be dealt with unjustly [by receiving less than your capital sums]” (the Quran 2/278-279).
This is indicative of the gravity of the sin that usurers and usurious dealers commit. Riba was one of the last forbidden matters declared by the Quran. Yet despite the unanimous agreement of Muslim scholars on the prohibition and dangers of riba, somewhat varied differences do exist on riba cases, types of usurious commodities and other analogically added cases, and the common ‘illa (effective cause) shared by the usurious commodities as well as the details of subtle riba.
Some recent scholars have also disputed the ruling on bank interest, especially in non-Muslim countries. What is the ruling on bank interest in non-Muslim countries ? What are the rulings on mortgage loans, student loans and other new cases of relevance in our contemporary society ? What is the decisively forbid- den riba ? Is there any difference between riba and bank interest ? What is the concept of interest in law and economics ? How does it differ from riba ? These are the key and most critical questions this paper will attempt to address in the following sections :
1. Riba : Concept, Types and Effects ;
2. Interest in Economics and Law ;
3. Purposes of Forbidding Riba and Interest ;
4. The Conclusion on whether Muslims Can Deal in Interest or its Derivatives.
(Replaced by Dr Mohammed Seddik starting 5 min 40 sec)