This chapter, covering verses 275 to 284, contains some good, charitable and practical financial instruction.
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The Prohibition of Usury
2:275 prohibits the devouring of usury, that is, charging if interest (“Ribba”, meaning “increase”). It is also called to devour usury, as in the biblical prohibition (e.g. Leviticus 25:36 “Take thou no interest of him or increase; but fear thy God; that thy brother may live with thee.”).
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The Hebrew word for “interest” in this verse comes from a root that means bite: the charging of interest is likened to a snake bite: you don’t feel it at first, but in the end it hurting a lot, or even kills you.
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While the prohibition of taking interest from your neighbour or family member who is down on his luck makes a lot of sense, financial institutions whose income is derived from interest cannot comply.
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This gave rise to legal bypasses which redefines loans as business transaction in a very complicated way.
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2:276-279 reiterate: Allah will erase usury and bring prosperity to the charitable. He does not love ungrateful sinners. He loves doers of good, regular prayers, and those who pay the poor-tax. The Believers should fear Allah and not collect interest on existing loans, if they really believe.
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Those who don’t – Allah and His Messenger declare war on them. They had better accept their principal without the interest, not exploiting and not exploited.
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2:280-281 encourage the Believers to go easy on a debtor who is in difficulties, and grant him respite till a time of ease, or better still, remit the debt as charity. When they are returned to Allah they will be paid in full. This is noble, and in line with the other two monotheistic religions.
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Contract Law
2:282 is the longest verse in the Quran. It deals with loan contracts. Here is a summary, which includes 2:283 as well, since it covers the same topic:
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When you deal with each other in contracting a debt for a fixed time, get a scribe to write it down with fairness, as Allah has taught him.
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The borrower should dictate the terms of the agreement with care and without omitting anything.
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If the borrower is senseless or weak, let his guardian dictate with fairness.
Call in two male witnesses to witness the contract.
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If there are not two men, then use as witnesses one man and two women of your choice.
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Two women are needed so that if one errs, the other may remind her.
The witnesses should not refuse when they are summoned to give testimony.
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Document any loan whether it is small or large, with the time of its falling due, as this is more equitable in the sight of Allah and assures greater accuracy in testimony, and removes doubt.
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Ready merchandise may be exchanged without a written contract, but witnesses are required.
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It is a transgression against Allah to harm or harass scribe and witnesses.
If a scribe cannot be found (you are on a journey), then a security should change hands.
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If an object is given on trust, the trustee must return the object faithfully.
It is forbidden to conceal not evidence. Whoever conceals evidence, his heart is sinful.
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This is pretty straightforward. In addition, the Believers must be aware that notwithstanding any of the foregoing, Allah knows what they do.
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2:284 “To Allah belongs all that is in the heavers and earth. Whether you make manifest what is in your hearts or hide it, Allah will call you to account for it. He will forgive whom He will, and chastise whom He will. Allah is powerful over everything.”
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Things have been going so well up to this point… Here again, Allah tells you that it is all in vain, because he will forgive whom he will and punish whom he will, and there is nothing anyone can do about it.
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So what is the point of all this religion stuff?
