Economic Verses: Riba and Islamic Finance

Among the most practically urgent issues addressed in Ma'arif al-Quran for contemporary Muslim readers is the treatment of riba — the prohibition of interest — and its implications for modern economic life. Mufti Shafi wrote at a time when Muslims were increasingly drawn into banking systems built on interest-based transactions, and his extended commentary on the riba verses in Surah al-Baqarah (2:275-281) and elsewhere provided scholarly grounding for generations of Muslims navigating these questions.

The Quranic warning against riba is among the most severe in the entire Book: those who consume riba are described as rising like one whom Shaytan has struck mad, and the final verses warn that those who persist in it face a declaration of war from Allah and His Messenger. Mufti Shafi takes the severity of these verses seriously and does not soften their force in his commentary. He presents riba as a major sin with both individual and social consequences, rooted in the exploitation of the financially vulnerable by the financially powerful.

On the definition of riba, Mufti Shafi follows the classical Hanafi position, which distinguishes between riba al-fadl (excess in exchange of similar goods) and riba al-nasi'ah (excess through deferral of payment). He explains the hadith enumerating the six ribawi commodities — gold, silver, wheat, barley, dates, and salt — and the conditions under which exchange of these commodities is permitted. He then extends this framework to modern currencies, arguing that paper money functions as a medium of exchange in a way analogous to gold and silver and therefore falls under the same prohibition.

The application of the riba prohibition to modern bank interest is handled with the directness that characterizes Mufti Shafi's approach. He rejects the argument, popular in some modernist circles, that modern bank interest differs categorically from the riba prohibited by the Quran because it involves commercial lending rather than consumer exploitation. In the Hanafi analysis he presents, the prohibition covers the increase itself, not merely the exploitative context in which it may occur. This position was and remains the standard Deobandi fatwa on conventional bank interest.

Mufti Shafi was also a pioneer in thinking through what a legitimate Islamic financial system might look like. His commentaries on the Quranic verses permitting trade (2:275 — 'Allah has permitted trade and prohibited riba') provided the foundation for discussions about murabaha, musharakah, and mudarabah as permissible alternatives to interest-based lending. His son Mufti Muhammad Taqi Usmani later became the leading global authority on Islamic finance, building directly on these foundations.

The treatment of the verses urging believers to give up remaining riba (2:278) and to return only the principal if they do (2:279) is used by Mufti Shafi to address practical questions: what should a Muslim do who has money in an interest-bearing account? He presents the classical ruling that accepting interest is impermissible, that interest already received cannot be kept for personal use but must be given away without intention of reward, and that the effort to exit interest-based relationships is itself an obligation.

For Muslim readers engaged in the practical challenge of managing finances in predominantly interest-based economies, Mufti Shafi's commentary provides not just prohibitions but a framework for understanding why the prohibition exists and how to work toward compliance. The theological grounding in the Quranic text makes these discussions more than legal rulings — they become part of a Muslim's engagement with the divine guidance itself.