This open letter was occasioned by the action of the MCB in co-operating with leading British figures of the Jewish and Christian religions to denounce the ‘usury’ practised by banks as the RBS. See this report in the Guardian.
First of all, I would like to congratulate you for having restored the word usury in public discourse. Even though the entire earth is under a deluge of usury it is still regarded as a crime by Muslims, as it used to be by Christians and Jews, and it is well that the concept is in use pejoratively again. This is an important achievement.
However, press coverage of your work unfortunately perpetuated a falsehood originated by the Christians that there is a legitimate and acceptable rate of interest and that anything in excess of that is considered usury and, moreover, that it is up to us as human beings to decide for ourselves what that legitimate rate of interest is. I refer you to our “An Open Letter to the Archbishop of Canterbury” of October 27th, 2008 in which we dealt at some length with this issue.
The truth is that for Muslims, and originally for Jews and Christians, ANY charge of interest no matter how miniscule is absolutely forbidden. But, the Christians have altered their position in a series of different rulings over the centuries that have ushered in the age of banking that we live in today. But, you may well have mentioned this and the media have failed to report it, or, if you did not, you may have been put in this position by your wish to work on some area of agreement with the Jews and Christians laying aside matters on which we differ. In principle we also agree with such initiatives, but nevertheless it is not acceptable for us to do so in any way which undermines the very basic foundations of the deen. To endorse interest even to the extent of a blade of grass is to strike a blow at the heart of the shariah.
As I am sure you know, the position of Islam on this matter is unequivocal. The Book of Allah, the Sunnah of His Messenger, may Allah bless him and grant him peace, and the consensus (ijma‘) of the knowledgeable scholars of Islam make it absolutely clear that any charge of interest is usury and is haram and is, moreover, one of the mortal wrong actions. There is simply no way to overturn these matters by any kind of ijtihad. There is no room for any misconceived ‘Islamic reformation’.
Pragmatically speaking, pegging interest at 8% is certainly a less onerous burden on borrowers than an APR of 254% as is charged legally by some institutions in this country, or the various credit card rates of 20%-40% etc. Indeed, we have seen simple parking fines which if paid within two weeks rather than a week double in amount, thus effectively being interest payments of thousands of percent.
The danger in brushing over smaller interest rates is that it amounts to declaring 8% interest halal, and thus making halal what Allah has declared haram. And as you certainly know it is only for Allah and His Messenger, may Allah bless him and grant him peace, to make things halal or haram. The gravity of doing such a thing must surely be known to you, for it amounts to an act of disbelief, may Allah protect you and me from such a step.
This serious caveat unfortunately detracts from our wish to congratulate you on making public the opposition of Islam and the Muslims to usury. We urge you to clarify without delay the complete unacceptability of any interest payments whatsoever no matter how small.
Allah, exalted is He, orders us to co-operate for the sake of the good when He says:
“Help each other to goodness and taqwa.
Do not help each other to wrongdoing and enmity.” (Surat al-Ma’idah: 2)
It is clear how important it is for Muslims in the UK or in any other place to work together for the establishment of the deen.
The impulse that drove you to work with non-Muslims for our common good is something I also applaud. Indeed, we ourselves have undertaken similar initiatives, most obviously in this very same area the seminar “Usury: the root cause of the injustices of our time” held in Norwich in 1987, whose transcripts were recently republished with additional material as Banking: the root cause of the injustices of our time, by Diwan Press, London, UK 2009, and which was very much directed to non-Muslims in the Green and ecological movement.
We suggest that to preserve the advance made by your taking this stance and to undo the misleading idea that smaller interest payments are acceptable, you ought immediately to make the position of Islam clear: that Muslims cannot co-operate in a reform of the banking system that simply adjusts the rate of interest, but must work for the abolition of all interest charges and, as a necessary corollary, the banking system itself. It is obligatory for us to make this absolutely clear and no pragmatic considerations may be used to justify silence on this point.
In the spirit of future closer co-operation, I recommend strongly that you find out about our very detailed position on this because I say without boasting that the Norwich Muslim community, under the leadership of Shaykh Dr. Abdalqadir as-Sufi and Hajj Umar Ibrahim Vadillo, have been leaders in mapping out this terrain in terms of the illegality in Islam, and in the previously revealed religions, of financial transactions such as usury, undercutting, regrating, forestalling, monopolising and hoarding, and in documenting the history of the rise of usury both in the West and in the Muslim lands, as well as in restoring a complete picture of the halal economic transactions of Islam such as profit-sharing trade and partnerships etc., and finally outlining a way forward in terms of restoring genuine currencies of gold and silver, establishing open markets and a variety of other measures, which are dealt with in more detail in ‘Open Trade – A Call to Action’ in Banking: the root cause of the injustices of our time.
Then, I suggest that we make the establishment of a non-usurious economy in the UK for the benefit of Muslims and non-Muslims a central plank of the MCB programme. I can promise you that if you adopt this you will find an extraordinary amount of goodwill from non-Muslims of all sorts, as well as the gratitude of the Muslims for bringing clarity in an area over which they are not happy, for no one that I have met is really convinced by the so-called ‘fatwas’ that permit matters such as mortgages, banking and the mis-named ‘Islamic banking’.
As well as being a dangerous moment in history with the very real likelihood of a slide into an extremely deep recession and the quite serious possibility that capitalism will, as in the 30’s, try to extricate itself from that by war, a war whose preliminaries are already obvious to all of us today, there is still an extraordinary opportunity for us to articulate what we know clearly and to take the lead in establishing something wholesome for all sections of our society. If you are interested in such a thing, I would be more than happy to be involved in that and to help in any way I can insha’Allah.