Riba (Interest): A Threat to Justice and Stability an Article by Dr Hussain Qadri

In this insightful article published in The Business on May 15, 2025, Prof. Dr. Hussain Mohi-ud-Din Qadri, a renowned economist and Islamic scholar, sheds light on the destructive impact of Riba (interest) in modern financial systems. Drawing from the Qur’an and Hadith, he emphasizes how Riba undermines spiritual values, promotes exploitation, and destabilizes economies. He calls for a shift toward interest-free, Shariah-compliant financial models rooted in justice, equity, and mutual welfare. A must-read for those seeking economic reform and ethical financial alternatives.By: Prof. Dr. Hussain Mohi-ud-Din Qadri (Economist)

The literal meaning of Riba is increase, growth, expansion, or enhancement in something. In Urdu, it is commonly referred to as sud (interest). In economic terms, Riba signifies unjust gain or exploitation in business and financial transactions.

Interest (Riba) poses a serious threat to the Islamic economic system. It not only harms an individual’s spirituality but also undermines social justice, moral integrity, and economic stability. In Islamic teachings, Riba is explicitly declared haram (forbidden) because it leads to exploitation and injustice. The Holy Qur'an presents Riba as such a severe crime that it warns of war against those involved in it:

“O you who have believed, fear Allah and give up what remains [due to you] of interest, if you should be believers. But if you do not, then be informed of a war [against you] from Allah and His Messenger.” (Al-Baqarah: 278–279)

This warning clearly indicates that earning profit through interest-based transactions is akin to rebellion against Allah and His Messenger ﷺ.

The very nature of interest is rooted in oppression. It is a form of transaction in which one party earns profit without any effort, while the other party suffers due to compulsion or pressure. That is why the Holy Prophet ﷺ cursed all those involved in interest — the one who takes it, gives it, writes the contract, and bears witness to it — and declared them all equal participants in the sin. This Hadith strikes at the core of financial systems that operate on interest, such as modern-day banks and financial institutions.

Islamic financial principles are entirely free from interest. The Islamic economic system is based on risk-sharing, labor, and partnership, where all parties share in both profit and loss. This structure is grounded in justice and protects the economy from exploitation. Unlike interest-based systems, Islamic contracts such as Mudarabah, Musharakah, Murabaha, and Ijarah are founded on mutual consent, transparency, and ethical responsibility, forming the foundation of a welfare economy.

Riba is not merely a financial issue; it also leads to moral decay and spiritual corruption. The Qur’an states that those who consume interest will rise on the Day of Judgment like those driven to madness by Satan (Al-Baqarah: 275). This portrays the severe disgrace and punishment awaiting those who deal in unjust financial practices for worldly gain.

On a societal level, interest has resulted in the concentration of wealth in a few hands. Poor nations and individuals are trapped in the clutches of international financial institutions that enslave them through interest-based loans. In contrast, the Islamic economic model promotes wealth circulation, zakat, charity, and mutual cooperation to maintain balance and support underprivileged communities.

Some attempt to justify interest by arguing that inflation reduces the value of money, so gaining profit through interest is permissible. However, such reasoning is neither valid under Shariah nor ethical. Islam allows profit through labor, partnership, and lawful trade — not through exploiting someone’s need or compulsion.

The Islamic financial system is not just a religious or personal alternative but a viable global solution for human welfare. It encourages social harmony, honesty, trust, and mutual respect. To protect the world from financial crises, class divides, and moral degradation, it is imperative to adopt an interest-free Islamic economy.

Therefore, all segments of society — especially businessmen, investors, and policymakers — must embrace Islamic financial principles and completely eliminate interest-based systems. Simultaneously, educational institutions, media, and religious platforms must play their role in raising awareness about the harms of Riba and the benefits of Islamic economics. Only then can we establish an economic framework built on justice, peace, integrity, and welfare — ensuring success in both this world and the Hereafter.