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Appendix 4: Ribā and Subterfuges of Earlier Peoples Who Received Divine Guidance
Asif Iftikhar

The strict prohibition of what has been translated in the Old Testament as ‘usury’– a word which in English is indicative of exploitative interest vis-a-vis ordinary interest, which presumably is not exploitative –, is in Hebrew a prohibition of Neshek (Neh’shek),1 which translates as ‘interest on a debt’ (a word built on the root Nashak: to strike with a sting, for example as a serpent does).2 If the translation ‘usury’ in contrast with ‘interest’ is to be accepted, how does one account for the fact that the Jews took so much trouble to come up with an interest-free bank, by the name of Agibi in Babylonia in 700 BC3, the basis of which was mortgage of some productive asset like a house etc which the bank hired out in exchange for a loan without interest – an improvement on the idea of Profit and Loss Sharing in Hammurabai’s code, but with its limitations in many working capital loans, which limitations necessitated declaring, for example, discount for encashment of the bills of exchange to be outside the ambit of interest, on the authority of one of their eminent rabbis, Maimonides.4 Obviously, all this ado was not about nothing. Unless the prohibition was of interest, they would not have made so much effort to find alternatives. Nevertheless, as far as non-Jews were concerned, the Jews ‘solved’ the problem with just one stroke. After the commandment ‘Thou shalt not lend upon usury to thy brother’ (De 23:19), we find a directive which is clearly an infiltration and which allowed the Jew to lend on ‘usury’ to one who was not a ‘brother’, that is not a Jew:

Unto a stranger thou mayest lend upon usury; but unto thy brother thou shalt not lend upon usury (De. 23:20).

This allowance opened the way for the Jewish money-lenders in Lombardy and gave birth to characters as Shylock in literature.

Christian scholars know that the money-exchangers of Mathhew (Kollubistes: coin dealer) of Mark and John (e.g. Mt. 21:12; Mk 11:15; Jn 2:15) whom Jesus turned out of the Temple were regular bankers (trapezitai), who also paid interest on deposits despite the Jewish prohibition. 5

In the orthodox tradition, interest was an anathema.6 The concept of service charge as a substitute for interest was evolved under the patronage of the Christian church, but the lending institutions that worked on this basis later became indistinguishable from saving banks, paying a small interest on deposits and charging a higher rate on advances.7 It is not surprising that in the same Christiandom where once, in England, prior to Edward II, a man would be hanged for money-lending and where the English Monarchy was able to get involved in interest only after Henry VIII had severed ties with Rome abolition of interest has now become an incongruous irrationality.

The preceding paragraphs show that issues as


i) whether the prohibition is of interest or of ‘usury’

ii) profit and loss sharing for financing

iii) leasing for financing

iv) service charge

v) charging interest on the loan to ‘non-believers’


are not new to such peoples as received Divine guidance through the messengers of God, for examples the Jews. Yet, these people, intentionally or unintentionally, fell prey to subterfuges and outright denials. May Allah save the Muslim from the same fate, and give those in authority among them the sagacity to know the truth and the courage to proclaim it.


1. See Strong’s Exhaustive Concordance of the Bible (Michigan, Grand Rapids: Baker Book House, 1984)

2. For example see (King James Version) Ex. 22:25; Le 25:36&37; De. 23:19 & Eze. 18:8&17.

3. Baron, A Social and Religious History of the Jews, vol. 1 (New York, 1958), p.105.

4. The Jewish Encyclopaedia, vol. 12 (New York, 1905), p. 390. This clearly shows that even the financial ingenuity of the Jews was unsuccessful in eliminating interest from the banking system.

5. Harper’s Bible Dictionary (New York: Harper & Rao, 1985) p.651.

6. The HarperCollins Encyclopaedia of Catholicism (New York: HarperCollins Publishers, Inc., 1995), p. 1291.

7. Sydney Homer, A History of Interest Rates (Rutgers University Press, 1977), p. 88.

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