IS INTEREST ILLICIT ?
Interest was imported into Turkish from Arabic and means the profit or yield returned from money lent.
Thus, is the word usury mentioned in the Holy Coran the equivalent of interest?
First of all we have to clarify that usury literally means excess. . .
That is, the excess in a profitable deal, trade or investment. . .
Prior to the Prophet Mohammad, usury was a profession in Arabia. . . the wealthy would lease their goods or gold, for an exorbitant return, to those who had need thereof. . this became quite an alluring profession and a preferable way to easily earn money. . .
But the outcome of this was that those having such need lost all their belongs to the usurers. . .
Ye who believe! Devour not usury, doubled and multiplied; But fear God; that he may (really) prosper. Verse 130, THE FAMILY OF IMRAN (AL-l-Imran) SURA 3
Turkey experienced a similar period with the money-changers.
Those who deposited with the money-changers whatever they were able to save, thinking they would reap a higher and easy return, let alone reaping higher interest, even lost their capital. . so much so that some of them even committed suicide. . .
A similar situation was experienced at the Imar Bank which applied exorbitant interest rates to United States Dollars deposits. . and people were disillusioned when the bank became insolvent. . .
Likewise, banks were applying 200% and even 300% delay interest to defaulted credit card holders. . . and many a credit card victim, leave alone the original borrowed amount, could not even pay the interest. . .
Time deposits used to earn high interest. People deposited their savings- previously money hidden under their pillows- with the banks. . .some of them even sold their homes to do so. . .all to reap higher yield. . .
VERSE 278, THE HEIFER (BAQARA) SURA 2
In commerce there is a concept called “terms of trade” . . . that is, you cannot sell a good bought at one Lira for ten Lira. . .if you do, you exceed the “terms of trade” and you break the law. . . The Town Hall officials audit whether the terms of trade are abided in the bazaars. . .
Exceeding the terms of trade is usury. . in other words, it is ill-gotten or excessive gains. . .
In old times there was not much money.. Barter was the main method of trade. Let’s say you lived in those days. . . Let’s assume you had a flock of sheep and the price (counter-value) of one camel was ten sheep. . . If you traded one camel for thirty sheep, you would have reaped an excessive gain according to the conditions of that time. . . It would have been illicit for being ill-gotten gains. . .
that they took usury, though they were forbidden, and that they devoured men’s substance wrongfully;- We have prepared for those among them who reject Faith a grievous punishment.
VERSE 161, THE WOMEN (NISAA) SURA 4
Interest is giving and taking money in exchange of money. . .in other words, you receive money with deposit interest rates and pay out money with credit rates. . .
Let’s say you are buying a home and you have found what you want, but you don’t have enough money. . . And, you don’t own your own home . . . you are a tenant. . . in order for you to have a roof over your head is it illicit for you to get a mortgage loan from the bank?
Or let’s say you have retired. . . you cannot work. . .what is wrong with your depositing your severance indemnities with a bank and earn supplemental income?
What is illicit is not the means (money) . . .but the objective. . .
If you want to gain more with your money. . . . . . much, much more . . . that is what is wrong. . .
In the narrow sense . . . you can conclude that interest is illicit. . . and narrow minded persons may come to the conclusion (and they do) that banks are doing illicit business. . . Whereas how would the economy be. . . if there were no banks? How would you transfer funds?
In the Holy Coran usury is used in the sense of ill-gotten gains. . . yet, many people interpret it as interest. . . And ignorant people have been mislead with the mantra ‘that interest is illicit and profit shares are lawful,” and, thus, have been directed to certain banks. . .
Whereas, in the Holy Coran, God has not used the term interest or profit share. .
The term used is usury. . .that is, ill-gotten gains. . .
This is true for trade as well as for funds deposited with banks. . .
80% to 90%, people think of their own interests. . . Few people. . . think of others before their own interests and profits. . .
A person selling a home thinks of how much more money he can make, instead of doing a good deed to the purchaser by making him a homeowner and freeing him from being a tenant. . .
This is how small traders are. . .thinking that the price of cigarettes will go up, they hide their inventory. . gasoline stations will not sell gasoline until the new prices are declared (by the authorities). . .why? Because most people . . . only think of their own gains. . .and, unfortunately, the majority of them wish to gain more that is rightful. . .
Man is egoistic and opportunistic. . he takes advantages of opportunities and seeks ways to earn more. . .
Let me give a specific example. . during the August 17 1999 earthquake a bottle of water was sold at (Old)Turkish Lira 5 million (New Turkish Lira 5). . .
What is evil is not the means. . . but the objective. . .
Today, a grocery store buys bread from the bakery and adds its legitimate profit to sell it just like banks add their legal interest to the deposits they receive from the depositors and lend; that is, . .what the grocery store does is no different than that of the bank . . l
If the grocery store exceeds the “terms of trade” or the bank applies excessive interest rates, they are both in violation of the same law. . .
Those who devour usury will not stand except as stands one whom the Evil One by his touch has driven to madness. That is because they say: “Trade is like usury.” But God has permitted trade, and forbidden usury. Those who after receiving direction from their Lord, desist, shall be pardoned for the past; their case is for God ( to judge); But those who repeat (the offense) are Companions of the Fire: . they will abide therein ( for ever). VERSE 275, THE HEIFER (BAQARA) SURA 2
Shortly: in the Holy Coran what is forbidden is almost always what is
excessive. . .
What is forbidden is not interest. . .but excessive interest rates. . .
And, that is what is illicit. . .
MAY GOD BE YOUR BELOVED AND YOUR COMPANION
SHOWING THE WAY
(AKIN ÖRSMEN 11.18.2005)
* The Coranic verses have been taken from the Holy Qu’ran, A. Yusuf Ali, 1975 Publication, Pitman Press, Great Britain