Riba and Hadith of Six Commodities

Electronic copy available at: http://ssrn.com/abstract=1790222

OCS-002–14

March 18, 2011

Riba and Hadith of Six Commodities

© Qazi Irfan, Islamabad (Pakistan) [email protected]

Abstract

Islamic legal maxim “it is undeniable that rules of law vary with

change in time” is moderately scientific in construct admitting the

evolution process of human knowledge, concepts and practices.

Although this broad-spectrum saying already existing among the

provisions of Islamic Jurisprudence, however more often than not,

the Islamic legalists offer unjust attitudinal resistance for such a

change even be considered let alone be happened and ignore the

reality of humans’ fallibility. The mortal beings of any period who

might be extraordinarily intelligent and perceptive and who can

anticipate or influence the progression of knowledge for several

hundred years next to them, despite that they still face their own

limitations, naturally imposed on them by the era they live in. The

earlier Islamic scholars were aware of this possibility owing to

their towering caliber and accordingly produced this broad rule

for the real world. It is an essential part of our belief that divine

and prophetic sayings hold relevance for all times which implies -

it is only human interpretation and analysis of holy sources that

may transform in the course of evolution. This discourse attempts

to comprehend the wisdom of subject hadith in context of evolved

knowledge and transformed concepts primarily by the economic

intellect of today and investigate the law derived from it. A much

sought coherence in monetary matters within Islamic laws is the

quest and driving force of the endeavor.

Keywords

Riba, Hadith, Contract of Sarf, Forex, Loan, Qard, Endoview, Exoview

JEL Classifications

D63, E42, K19, P19, Z10

Electronic copy available at: http://ssrn.com/abstract=1790222

Riba and Hadith of Six Commodities –

Introduction

Philosophy of the science of hadith is based on two key rudiments;

the authenticity establishing process for the chain of transmission

(sanad) and the text (matn) of hadith itself. The great Muslim scholars

who instituted this discipline were extremely precautious in their

tasks that is visible in their research attitude; all their efforts were

directed to discover and report the exact message of Prophet (SAW)

because they also believed that the prophetic wisdom rests in the

exactness of prophetic messages which indisputably is one of the

two primary sources of Islamic Law. Then we believe Islam is the

religion of nature (fitrah)1, nature is harmonious and since eternal

harmony exists in primary sources, thus the interpretation (or law)

based on these sources shall also conform to nature.

Nature (fitrah) has major common factor in all humans while piety

(taqwa) is entirely individualistic, therefore by desirable quality of

logic – rationalism has preference over pietism, and those who

favour pietism by ignoring rational attitude indeed act against the

nature and thus religion, and consequently can’t practice piety by

themselves in effect. The cautious attitude anchored in taqwa that

we see in earlier scholars is not because of rejecting rationalism

but only because of the absence of ‘corresponding rationality’.

For instance in early Fiqh, it is assumed that every loan (qard) has a

benefit attached to it2 although without quantifying what a benefit

is? There may not be an economic or monetary benefit out of loan

(qard) to the borrower except a mental peace alone, shall any non-

economic and non-monetary bonus be also included in the benefit

arising from delay i.e., the excess through nasi’ah or nasa’ (delay)3

which is the primary argument in defining riba-al-nasiah. There is no

underlying principle or concept behind this piety based thinking

emerging by reason of stern divine and prophetic rulings on Riba.

It might be true, every loan can provide some kind of advantage

to the borrower but is there any rationale that every benefit due to

delay is Riba? The corresponding rationality is absolutely missing

here; even today we have no comprehensible concept as what is

benefit, what is profit, what is riba, so on and so forth. The later 1 Quran 30:30 (Al-Room) 2 Which goes to the borrower along with loan and whether the borrower makes use of it or not

but is available to him. 3 Article 3.1 “Riba in Excess” in “The Concept of Riba and Islamic Banking” by I.A.K. Nyazee


efforts of characterizing riba-al-nasiah as “riba al-Quran” could not

bring any real change in the previous concept of riba-al-nasiah4 and

this labeling is also without any corresponding rationality for the

concept of loan (qard) it is based on.

The reality of life is such that if we don’t know what is truth which

might be a straightforward ‘yes’ or ‘no’ to a question, it takes an

unending debate to find that simple answer. A similar fact in the

evolution of knowledge says if concepts are missing or derailed

then intellectual journey in exploring subjects is never satisfying.

The intellectual expedition on Riba is continuing without a resolve

so far, the concept of loan (qard) produced in this discourse is quite

imperfect rather defective seriously which is evident from present

law-violating state of affairs across common muslims and their

practices – i.e., fixed term loans are not permissible even without

stipulated excess as per existing Islamic Law (the contract of sarf),

but muslims in general, neither do they comprehend nor comply

this unrealistic stance and defy it on daily basis extending mutual

and social cooperation to each other by transacting fixed term

loans without any stipulated excess in the principal amount they

lend, in doing so - there is no feeling of committing any sin. This is

how the nature (fitrah) demonstrates and takes its course.

One may argue or place a question here – who is wrong, people

or the law? But then who will decide this - law or the people? The

answer is simple – law and people can decide but it must conform

to the nature (fitrah) being the scrutiny criterion (Quran 30:30). For the

people or for the law, there is no substantial argument (dalil) to

support this law except the law itself. The source of this law is the

subject hadith of six commodities that we intend to pursue here

and might observe what went wrong in deriving the law from it.

Ahadith of Six Commodities

Out of several reliable collections of ahadith, here the reference for

specific evidences is obtained from Sahih Muslim i.e., two famous

ahadith of six commodities with dissimilar asnad (sing. sanad) varying

a little in concluding sections, employed here for perusal.

4 Today, riba-al-nasiah is a benefit (excess) towards lender only which is a change of stance from

earlier Fiqh but is not reflected in unchanged stances on qard-hasan and the contract of sarf


The Arabic versions5 mention the sanad of hadith.

1. Narrated by Ubadah b. Samit, Hadith #1569, Vol 2, Muslim

Referenced English Translation6 :

Ubida b. al-Simit (Allah be pleased with him) reported Allah's

Messenger (may peace be upon him) as saying: Gold is to be

paid for by gold, silver by silver, wheat by wheat, barley by

barley, dates by dates, and salt by salt, like for like and equal

for equal, payment being made hand to hand. If these classes

differ, then sell as you wish if payment is made hand to hand.

Improved English Translation:

Ubadah b. al-Samit (Allah be pleased with him) reported Allah's

Messenger (may peace be upon him) as saying: gold in

exchange of gold7, and silver in exchange of silver, and wheat

in exchange of wheat, and barley in exchange of barley, and

dates in exchange of dates, and salt in exchange of salt; like for

like, equal for equal, be exchanged hand to hand. If the genus

differs then sell as you wish if exchange is made hand to hand.

2. Narrated by Abu Saeed Khudri, Hadith #1570, Vol 2, Muslim

5 Sahih_Muslim_Vol2.pdf, Arabic to Urdu compilation of Sahih Muslim by Moulana Aziz-ur Rahman 6 Online Reference - Muslim :: Book 10 : Hadith 3853, web link

<http://www.searchtruth.com/book_display.php?book=010&translator=2&start=3854&number=3853> 7 The translation of “gold for gold” or “gold in exchange of gold” for the Arabic expression of ( ) is more appropriate instead of the translation used in online reference that is “gold

is to be paid for by gold”.



Abu Sa'id al-Khudri (Allah be pleased with him) reported Allah's

Messenger (may peace be upon him) as saying: Gold is to be

paid for by gold, silver by silver, wheat by wheat, barley by

barley, dates by dates, salt by salt, like by like, payment being

made hand to hand. He who made an addition to it, or asked for

an addition, in fact dealt in usury. The receiver and the giver are

equally guilty.

Improved English Translation:

Abu Saeed al-Khudri (Allah be pleased with him) reported

Allah's Messenger (may peace be upon him) as saying: gold in

exchange of gold, and silver in exchange of silver, and wheat in

exchange of wheat, and barley in exchange of barley, and

dates in exchange of dates, and salt in exchange of salt; like for

like, be exchanged hand to hand, he who paid extra or asked

extra, in fact dealt in usury. The receiver and the giver are

equally guilty.

Understanding the Two Ahadith

Let us first list out fine points of hadith texts chronologically:

1. Sahih Muslim hadith # 1569 says:

a) A commodity in exchange of the same commodity (six commodities stated – gold, silver, wheat, barley, dates and salt)

b) Like for like

c) Equal for equal

d) Hand to hand

e) If the genus differs then sell as you wish if exchange is made hand to hand

2. Sahih Muslim hadith # 1570 says:

a) A commodity in exchange of the same commodity (six commodities stated – gold, silver, wheat, barley, dates and salt)

b) Like for like

c) Hand to hand

8 Online Reference - Muslim :: Book 10 : Hadith 3854, web link

<http://www.searchtruth.com/book_display.php?book=010&translator=2&start=3854&number=3854>


d) He who paid extra or asked extra, in fact dealt in usury.

e) The receiver and the giver are equally guilty.

The above fine points embrace the philosophy of set transactions

and given conditions in entirety, to comprehend the intact span of

affairs narrated in these evidences, we may start addressing each

subtlety in sequence and explore its substance, certainly without

compromising internal consistency of ahadith. Since my primary

sphere of investigation is the concept level of subject, accordingly

I shall first see content above its legal stature, although that will

eventually help to imply the law but that is only after convincing

coherence established at concept level particularly for the subject

ahadith and generally for overall Islamic beliefs but excluding the

law argued with here. As expected, one has to observe some rules

or norms while delving into such a caring task, employing control

is required, for such reason I have laid down few simple “rules of

interpretation” at my own presumably being enough to serve the

purpose and concerns given that the rules are “belief based” and

I believe all muslims share this belief.

Rules for interpretation :

1. To remain within the text of hadith to find rationale and message, this is because in our belief – each hadith has a definite message

2. A hadith is internally consistent for its definite message, once this

internal consistency is established and available; it offers external consistency to other divine and prophetic messages. Belief again9.

3. To explain ahadith here, one shall offer only contextual, natural

and commonsensical argument without ambiguity of sense

4. The primary sources i.e., Quran and Sunnah/Ahadith provide relative

foundational harmony for rule #3.

Naturally, few queries come to mind instantaneously for each fine

point pulled out of the text (matn) of hadith; these logical questions

are also listed before the explanation begins for each section.

9 It is a demand of belief for Muslims that consistency of a prophetic message with other prophetic

and divine messages is deemed certain, however since the reliability of ahadith depend on its sanad subjected to strict passing criterion in granting any hadith the status of sahih or else, thus if any inconsistency in sahih ahadith is apparently detectable, then either the ahadith might be researched again (however have no idea as how), or the disparity shall be resolved according to nature (fitrah) or the inconsistent subject matter shall be left open for coming times and generations to resolve.


1. The The The The Six Six Six Six CommoditiesCommoditiesCommoditiesCommodities

Text (matn) section of hadith :

gold in exchange of gold, and silver in exchange of silver, and wheat in exchange of wheat, and barley in exchange of barley, and dates in exchange of dates, and salt in exchange of salt

Related queries :

1. Why only six commodities? Shall we restrict to six commodities or can we add more to the list by analogy (qiyas) of commodities?

2. Can we extend the application of ahadith to other objects?

3. What is the commonality in given six commodities?

A hadith - the saying of Prophet (SAW) certainly had some situation

or a reason of its origination, the message might had been uttered

in one tone or another or through some particular sentiments, but

those sensitivities are not available to us, we have the text (matn)

only that we can explore as per rules defined above, conjecture or

guess about text is least wanted. For instance, the flow of select

text (rhythmic stream of phrases) with coordinating conjunction

“and” (wa) before every commodity gives a narrative impression

of advancing continuity and it looks that this flow is not truncated

but shortened, yet there is no way to claim a position here by this

guess, the sole judgment probability for the tendency of tone was

ended with the very first listener of hadith, now it is impossible that

a definite verbalization of such continuity be detected resolutely

from the text alone by later recipients of the message despite this

advancing continuity style of the text, it will merely be a guess to

include other commodities in the list on this basis. Likewise it also

is a little advanced guess if we make group of stated commodities

like food and metal and extend the list by analogy of genus, its

characteristics or utility since we don’t see any clue in ahadith for

such deduction and if we had then the issue were not existing. The

alternate fact is, there is no point in the figure of six; the list might

have been more if Prophet (SAW) had said or less if so had he said.

There is rigid stance witnessed in the chronicles on this aspect of

ahadith arguing to confine to six stated commodities only, however

a majority of Islamic scholars of mainstream schools of thought

believe there must be other commodities included to the list, both


stances relate to respective implications of “riba al fadl10”. For the

rigid faction, there might be other reasons of inflexibility but one

is sure that they had no certain method to remove their restriction.

On the other hand the majority faction holding the view to expand

the list, employed speculative analogy technique for the purpose.

The analogical deduction methodology with a variety of criterions

they engaged to find the effective cause (illa’), could not result in

building consensus (on illa’), consequently all schools are stuck to

their own positions hitherto, the essential reason of their differing

positions is rooted in the speculative nature of criterion each has

applied, and there is no convincing reason – why one speculative

position should surrender to another speculative position? If you

are neutral and not biased towards any school then it can well be

noticed from dissimilar position of four main fiqhs11; speculation

(guess) may not be wrong in whole but probably it’s a partial truth

or half-done fact, thus for an effective cause (illa’) criterion – a total

agreement would be a demand from them almost out of question,

this never happened as well – history validates.

It is neither denied here nor it should be, to expand the commodity

(object) list but with guess methods because applying speculative

treatment may not hold the internal consistency of hadith and will

distort its definite message consequently. Thus answer to the first

query on this part of hadith text is – no addition to commodity list is

suitable by conjecture or analogical reason or organic parallel,

the argument (dalil) for this position is straightforward i.e., subject

ahadith neither restrict to add more commodities nor offer any

definite provision for commodity-similarity option to employ, and

neither do we find such an analogical option as well (to consider)

from other ahadith at least in my knowledge.

The question here is – how shall we include more commodities if

not by commodity analogy? We shall find some way to do it from

contextual evidence only and since we believe each hadith contain

a definite message; hence firstly we must discover the underlying

principle of its definite message and then apply that rationale to

10 A type of Riba having at least two different concepts changed in the process of Fiqh development. 11 The analogy (qiyas) method was employed by various fiqhs (Islamic schools of thoughts) to find a

common efficient cause (illa’) in six commodities also known as ribawi items. Hanafi school include (weight, volume), Shafi school (medium of exchange, eatables), Maliki school (eatables, preserve-able), Hanbali school (weight, volume, and edibles).


extend the commodity list so that it offers external consistency to

objects not mentioned in hadith. Practically, this methodology is

quite deviating from earlier scholarship.

Given that both ahadith are guiding deeds for Muslims by unfolding

some lawful and unlawful transactions with conditions where few

commodities are just objects to explain those dealings, thus in my

view, the contextual emphasize is not formed on commodities per

se i.e., like on gold (al dhahab) but the transaction of the same – that

is “gold in exchange of gold (al dhahab bi’ dhahab)”12, this is a definite

foreground feature internally consistent by recurrence in selected

evidences i.e., all six occurrences in ahadith where commodities

are different but validate this stability. This format of transaction

that is internally consistent, in conformity with given conditions

will provide a transaction-conditions-similarity option that should

be the natural place for other objects practically.

Thus answer to the second query on this part of the text is yes, we

may extend the application of ahadith to other commodities only if

those objects fall in line with the rationale of transactions. Indeed,

this is one divergent approach from analogical deduction utilizing

commodity attributes (weight, volume, edibles etc.) that we see in

various fiqhs where no unanimity was achieved just because of the

speculative nature of criterion.

Let us briefly reaffirm the difference of understanding; commodity

as such, like gold (al dhahab), is not the focus (subject) of hadith but

the transaction of the same commodity i.e., “gold in exchange of

gold (al dhahab bi’ dhahab)”; accordingly thus, we are not attempting

here to find any kind of commonality in given six commodities by

way of extra-contextual guess methods to extend the list.

Owing to this distinctive approach here, we are shifting objective

focus from commodity-similarity to functional-similarity13 i.e., not

to include more commodities on the basis of their attributes of

similarity but to employ transaction rationale which implies that

any object satisfying this internally defined criterion of ahadith will

come under the effective domain of these ahadith. This resolve of 12 This exchange format applies if true (homogeneously) to one set of conditions or else if not true

(heterogeneously, only in hadith #1569) to the other (a subset of first set of conditions). 13 Of stipulated transactions only since we have not taken commodities as the subject & accordingly

not attempting their functional properties common in all like Exchangeability and Fungibility.


functional-similarity will allow us to include things which are not

commodities such as paper money14. The concept of paper money

was not available to earlier scholars otherwise they definitely had

not used the weight and volume type criteria15 since they could

not ignore the fact of using paper money as money for its obvious

relation to riba and the contract of sarf, this has already been

realized by modern-day scholarship16 and they approve the reality

of using paper money as money though not by given criterion (as

dalil) however by the authority they assume. Now given that paper

money is approved and ruled by the contract of sarf thus to

assimilate present form of money, naturally we need at least one

higher level in the hierarchy of classification (in or) above “genus”

allowing us to insert both commodities and non-commodities as

objects under the effective domain of ahadith. Let us designate this

distinct category as “family of genus” or “genus family”, i.e., all

members of this category are potential objects for the said types

of transactions described within these ahadith; summing up, in this

“genus family”, exchange of its member genus (homo or hetero) is

the subject and genus itself is the object of topical ahadith.

For this part of the text (matn), the abridged position is:

Instead of commodities, we have adapted the subject of ahadith to

be the transactions (homogeneous or heterogeneous exchange) of

few selected genus each possibly having its own species. Since

the subject is modified, accordingly we shall see the possibility of

expansion in the list of objects by means of transactions rationale

(that we have to find), so the commodities-similarity has become

irrelevant and we intend to replace it with functional-similarity

where all probable objects conforming to this option are grouped

in a “genus family” to generalize the list in one labeled category.

The argument (dalil) for our viewpoint lies in natural appearance

of the evidence as seen by our contemporary economic intellect,

there is no explicit restriction to alter the subject or adding objects

(for adding at least, majority of scholars agreed on this view).

14 Paper (fiat) money irks many Islamic minds, but the reality of matter is - so far no sound rejection

is legalized from Shariah by contemporary authorities on religion rather they accept it in practice. 15 Although Shafi School include ‘medium of exchange’ in criteria but that seems had emerged from

the mentioning of gold and silver in the list and not from functional-similarity sought here. 16 Nyazee says “The truth is that if the strict legal position of Islamic Law is adopted, all transactions

in paper currency will become invalid.” ref article 7.3-The Hukm of Modern Currency in his “The Concept of Riba and Islamic Banking”


2. Diktat Diktat Diktat Diktat –––– Like for Like Like for Like Like for Like Like for Like


like for like (mithalan bi’ mithal)

Related queries :

1. Is it a condition or just a reiteration of homogeneity?

2. Like for like stands for what likeness?

Homogeneity in six commodities of exchange is already featured

repeatedly for six times in previously selected text of hadith where

this part of the text (matn) relates17, yet the possibility of reiteration

of homogeneity can not be ruled out, equally it may be true as a

condition too. We need to apply commonsensical reason here to

distinguish this. By considering next condition explicated in hadith

after this instruction – no one can believe Prophet (SAW) could had

ordained say for example to transact gold of 22 carat with gold of

18 carat in equal for equal – no sane, normal, rational thinker can

deduce the demand of such an anomalous transaction by ignoring

qualities of gold; suitably around we have a noble evidence in this

connection too, relating to Bilal (RA) where this disparity of quality

in a commodity is dealt with18 and does not illustrate any sense of

transacting dissimilar qualities in equal measures. If we believe

“like for like” command as reiterating homogeneity only, that will

imply, we shall ignore qualities or varieties in commodities which

is quite irrational and illogical deduction, therefore answering the

first query – the set phrase unquestionably is a condition beyond

doubt or at the most a reiteration of homogeneity plus a condition.

What exactly this condition implies? Until this time, we only have

a reason or distinction suggested in arguments that speaks about

the “qualities” in commodities. It is true as well and accepted that

“like for like” shall include same quality or same variety or same

species19 (organically) within a genus or commodity, but this is not

enough to interpret entire spectrum of the diktat because it means

the ‘intrinsic quality’ alone whereas people employ other decisive

17 Irrespective of stance if we take it as a condition or a reiteration (re-emphasize on homogeneity) 18 Muslim hadith #1589, where Bilal (RA) was directed to first sell the inferior quality dates and then

buy the superior quality from its proceeds 19 In the hierarchy of modern scientific classification system, species are the sub category of genus

which in turn is a sub category of a family and so on.


factors in their intended exchanges as well. The inquisitive minds

with current intellect also may not be satisfied if we fail to explain

it further because it is possible that though genus is same and the

species is same, even then the next condition of “equal for equal”

may not hold economic justice in exchange transaction of formal

equality sought in tradition – but hadith is not flawed for sure, it is

only our inadequacies that produce such inconsistencies. We are

required to investigate this by our contemporary intelligence.

The condition of “like for like” is a broad-spectrum expression on

place that may not be translated today simply or entirely to imply

only “different qualities” within a genus, neither the subject ahadith

are saying that explicitly, it has more significance than projected.

The ‘species quality’ element deduced previously from this decree,

in my view, is just because previous explorers of ahadith surmised

stated six commodities as being the subject of the tradition and

the connected law was formed before the economic awareness of

valuation was integrated in to knowledge, accordingly it needs a

revisit of the subject as suggested throughout this discourse.

An example here may help to elaborate the point, let us think of a

commodity (say mango) brought in market from a particular tree

by two different methods of transportation i.e., by sea and by air,

the commodity/genus is same, the quality/species is identical yet

these are sold at distinct prices in same market or you can say the

exchange-value for each is different despite same genus/species.

The above case in point is quoted from a real evidence of practice

in my first hand knowledge, the reason for the difference in prices

is the mode of transportation that affects the freshness and life of

commodity thus valued differently in market. This implies mango

quality may also be ascertained in terms of its freshness and life,

and of course these are not intrinsic features of the commodity but

simply the variable factors of valuation though genus and species

are same; likewise there are non-perishable types of commodities

exhibiting non-intrinsic reasons that forms the basis for different

exchange-values despite being identical in kind and quality. The

economic thinking now is more complex and factorized then past

simple trade practices of essential commodities, value addition is

a subject for example, where identical commodities may produce

articles of trade with varied exchange-values, not ignorable at all.


The natural human requirement of ‘valuation20’ is ubiquitous that

is an accepted truth; several obvious factors structure the basis of

valuation and may vary for each case; acceptability of valuation

factors in people is also ever present; when people do exchanges,

they have many concerns and a consolidated view of all aspects

resulting in exchange describe their value judgment.

Can value judgment of genus be restricted to its ‘intrinsic quality’

only? Even if so, how to translate it in terms of value i.e., what is

its ‘intrinsic value’21? There is no method to define unknown value

contained in genus as such but by the perception of people, social

standards, customs etc., then why these appraisal means shall be

ignored when some unknown value is added to the genus, there is

no corresponding rationality for this exception. We need to think

above mere ‘intrinsic quality’ feature in order to imply a universal

sense of the diktat. The ‘valuation’ (value judgment of whole set of

values) is a prerequisite of exchange, rightly thus “like for like” in

its broad sense shall signify an overall “value judgment” when it

is transformed in to law. The contract of Sarf, unfortunately, fails

to translate this value judgment when it neglects craftsmanship

and sadly does not offer any rationale at all to hold this position.

How one can justify that if an artisan who spent one whole month

in making necklace of 22k gold that weighs 10 grams, be ordered

to exchange his artifact with a coin of 10 grams in 22k gold? Shall

we deduce that making gold artifacts is prohibited indirectly? How

the usurpation of skills, labour and efforts can be justified that is

consumed in making necklace from gold? Absolutely, there is no

“corresponding rationality” for the law that says craftsmanship

has no value; the law formation had missed something definitely;

there is no contextual evidence in its source neither it offers any

harmony with nature, it suggests ignoring what is required to be

honoured and rewarded. It’s undesirable that commodity be given

more import then the human beings, in our age and intellect, such

is not the purpose expected of Sunnah, people are important not

material. This denial facet of law surely has its origin in treating

commodities as subject of ahadith and the deficiency in economic

acquaintance of transaction beyond their qualities.

20 Assessment of value or precisely the assessment of exchange-value 21 Some value within the genus itself, independent of individual’s perception, thus unknown

practically, intrinsic quality is however different, understandable for its organic or utility features.


For the second query on likeness, if we restrict the significance of

the diktat holding just the same genus and its species or the same

commodity and its quality, then other possible causes influencing

exchange-values of objects shall be ignored in the exchange, yet

again, this will be unnatural, irrational and illogical deduction.

The current economic intelligence asks to integrate ‘valuation’ by

all applicable means available to exchange-event taking place. It

is the only way to ensure economic justice from exchange-events.

This approach is not new to Islamic thinking, is it not required in

Islam to disclose all pertinent details including faults of the article

of trade, of course for the same purpose of economic justice.

It is undeniable that knowledge has evolved with time, now offers

more aspects to be considered in contracts, e.g. the fineness of

gold22; similarly ‘valuation’ is an indispensable factor required in

transactions. For our times, we may conclude that “like for like” or

likeness shall stand for the same quality or the same species in

the absence of other valuation factors or by integrating economic

aspect of ‘valuation’ let us say it means ‘homo-exchange-values’

(i.e., exchange-values of objects having homogeneous kinds and

identical species) at the same place of transaction23.


We bring in valuation (i.e., judgment/measure of value) replacing

simple intrinsic qualities of commodities, that is - we detached the

ever present concern of value from objects and connected it to

exchange transaction (our perception about the subject of ahadith)

that is inclusive of objects’ qualities. The argument (dalil) for this

change lies in the natural ‘valuation’ requirement of people which

coheres with the broad sense of the diktat and our contemporary

economic intelligence as well. The prior cited tradition <Bilal (RA)>

is a proof of enforced valuation though that was a case of unlike

species but can’t be neglected for identical species for the reason

that economic justice by itself results from exchange transaction.

22The etymology of carat <http://www.etymonline.com/index.php?search=carat&searchmode=term>

tells us that qualities of gold were learned some where in mid of fifteenth century, before that the fineness of gold was not an issue but only its forms & weight were the aspects of gold contracts.

23Intrinsic quality of same genus/species may not vary on different places at one given time, but their valuation factors affecting exchange-values might be different on different places, therefore to consider exchange-values as likeness, the “same place of transaction” shall be a condition


3. Diktat Diktat Diktat Diktat –––– Equal for Equal Equal for Equal Equal for Equal Equal for Equal24


Equal for equal (sawa’n bi’ sawa)

Related queries :

1. Equal for equal stands for what equivalence?

2. Why such equivalence is sought?

3. Is there some obscured purpose or metaphorical meanings of such unequivocal equality despite its least appeal?

The sequence or the placement of each expression (diktat) in both

ahadith is highly technical, this decree relates to previous two parts

as discussed above, reinforcing the former sense and generating

a directed view of the definite message. When genus is same and

species or qualities are also same then equality can be achieved

by any standard of measurement suitable for the genus involved

in the exchange. Indisputably, the equivalence sought in tradition

requires some standard unit of measurement in any case.

The “equal for equal” is an open or general expression that can’t

be translated exclusively in any one form of measurement, like in

numbers, the quantitative methods or volumetric units or else; the

obvious inclusive purpose of this diktat can not be justified by one

or the other specific methods of measurement and since subject is

exchange of commodities, appropriately an all-purpose economic

turn of phrase is required to express the broad meaning of “equal

for equal”, in our context, say it is “equal homo-exchange-values”

no matter whatever the method or the unit of measurement is.

It is frequently observed that people question about the sense of

equivalence required here - why one would engage in a futile and

pointless operation of equal homo-exchange-values concurrently.

Indeed, it makes half of the query and whenever I meet this half,

instantly strive to articulate the other half i.e., but why one would

engage in business of unequal homo-exchange-values at once? If

we merge the two to make a query in full then it compels the mind

to think as why shall people assume simultaneous exchanges of

homogeneous equals in the first place i.e., what are the possible

24 Hadith # 1569 only


causes here? There is no perceptible economic reason either for

equal or unequal concurrent exchange of homo-exchange-values;

both queries are genuine if we see it by economic intellect, yet the

possibility of other causes is predictable. The fundamental cause

of exchange-event lies in the circumstances of participants25, that

include economic or otherwise; no exchange-event will ever take

place without its own reason, cause, motive, purpose or the basis

of activity which may be identical or different for each participant.

The intended purpose of participant would be served through the

object(s) of exchange26 that acts as a carrier of gain or benefit to

one, both or all involved in the operation, although loss is also

transported through the object(s) of exchange but it never being

the purpose in its own for any rational economic entity.

In a mutual exchange comprising same genus and same species,

or homo-exchange-values, cause of need or necessity (dharurah) is

certain for one participant (more exactly the sole triggering cause

for such an exchange-event to occur), while the other reason with

second participant may be service or the motive of benefit (faidah)

if he is not having a matching need to agree with the former need,

especially the motive of benefit in such an exchange can’t initiate

the event but is a counter purpose to redeem the cause of need.

In case of equal exchange (of homo-exchange-values), economic

gain is non-existent and there is no reason for exchange-event to

take place except need i.e., only need-to-need or need-to-service

correlation of causes is effectual here. To all good intents and

purposes of human interactions, both forms of relationships are

time-honored, say for instance if one needs to exchange a higher

denomination of currency to its lower units, I think it must have

been in practice from the time when money was invented and its

various denominations are existing simply because people seek

and need this facility to fulfill their commitments on daily basis. It

is vitally imperative27 aspect although seems insignificant, even if

this alone is the purpose of equivalence sought in hadith, it is more

than enough to appreciate the diktat because different value units

in any money/currency systems are irresistible. Here correlations

of causes have social significance in a socio-economic milieu.

25 In my earlier article titled “Murabaha Financing VS Lending on Interest”, Pg.35 26 Ibid, Pg.37 27 It is not difficult to comprehend if one can imagine living without the option of unit systems.


On the contrary, in unequal exchange (of homo-exchange-values)

an economic gain is definitely available because of the inequality

in exchange-values and since exchange-event will occur only due

to the need of one partaker hence only need-to-benefit correlation

of causes is effective here which implies that the difference in two

exchange-values will settle towards one participant at the cost of

the other (in need).

In both cases, the triggering cause of exchange-event is need, to

meet this if the one in need has an option to select need-to-need

or need-to-service type relationship, rationally he will never opt

for need-to-benefit link unless he is not forced to. Absolutely there

is no reason to justify the last disadvantaged option, and current

economic thinking also realize this – “Standard economic intuition of

revealed preference implies that when two parties freely enter into a

contract then neither should be worse off 28”. It can’t only be a matter

of worse-off degree but principle; even negligible worse-off shall

be unacceptable, and no one shall force or be forced to lose.

The need-to-benefit correlation uses force for its realization, this

compulsion has two origins, the circumstances of the person and

the non-availability of first two choices. People must have access

to first options as privileges by the governments. If we try out an

experiment of nature for these options by offering all three to any

economic entity, everyone will pick one of the first two choices29

logically since no one would want to share-out even minimal of

his exchange-value just for nothing. In this perspective, answer to

the second query is – even though people may not desire to get

engaged in simultaneous exchange of homo-exchange-values but

only because of an inevitable need30 and it is not justifiable by

any reason (in economics or ethics) that such need be treated as

an opportunity to take advantage of, rather on the contrary by the

high merits of prophetic wisdom, the dictum suggests the need

must be handled with equality simply because advantage does

not exist actually and there is no understandable justification for

this act of benefit, it’s the demand of nature (fitrah).

28 Roberts, Michael J. and Key, Nigel (2005) "Losing Under Contract: Transaction-Cost Externalities

and Spot Market Disintegration," Journal of Agricultural & Food Industrial Organization: Vol. 3 : Iss. 2,s 29 Every one of us can apply this to oneself rationally as an experiment, consequently either he will

confirm this proposition or else he might present some argument to differ with. 30 A need shall be considered ‘inevitable’ if there is no motive of benefit but still need exists.


If truth be told, the last query is really challenging, i.e., what is the

purpose in stressing on transacting equal homo-exchange-values

as no appeal or economic cause exists in equal or even unequal

concurrent exchanges? The prophetic messages are not without a

purpose as well that we believe; funny dealings like for example,

“someone swapping ten dinars with someone else’s ten dinars in

tandem” is not harmful affair at all neither it shall invite serious

insistence of order. No economic cause; no need to tackle the fun,

the purpose definitely is non-economic and this conclusion is not

by syllogistic reasoning (qiyas) but a binary complementary truth

of this or that (yes or no) nature i.e., an exchange activity is either

economic or non-economic in its totality. In this perspective, let us

conclude that the purpose or substance of message makes a case

of social function or common behaviour.

Here equivalence is the purpose for which a process of valuation

is essential but no rights for this process are granted to exchange

participants in this part of ahadith then how such equivalence will

be established? The only possibility of equivalence here is when

valuation is preset. The social assigned-exchange-value schemes

are predetermined methods of valuation which are communally

beneficial for all and non-negotiable inherently just because their

units inherit values by assignment of social accord and no one

has any right to alter those norms mutually or by force but only

through another social contract. This is true for other standards of

units too e.g. scientific. In this background, the focal concept of

‘equal-for-equal’ command seems to be the endorsement of social

support and enforcement of social norms (standards) of valuation.


The straight and clearly identifiable non-economic purpose of the

message here is “to respect the valuation standards” prevalent in

society; until this point, it’s the rationale of transaction described

in the first part of traditions. The argument we built earlier is that

‘valuation’ is related to transaction and we can not disregard any

factor influencing exchange-values. The realization of equality in

exchange-values as instructed has no economic sense or demand

so the purpose is societal and relates to assigned exchange-value

schemes defined by society i.e., the valuation standard or simply

the medium of exchange.


4. Diktat Diktat Diktat Diktat –––– If the Genus Differ If the Genus Differ If the Genus Differ If the Genus Differ….….….….31


If the genus differs then sell as you wish if exchange is made hand to hand

Related queries :

1. The condition “if the genus differs” applies to discrete genus exchange only or also to hybrid genus exchange?

2. What is the significance of “if the genus differs”?

3. What does it imply “then sell as you wish”?

We will not discuss hand to hand part of this diktat here but in the

next section because that also applies to previous fine points and

may be discussed in its overall perspective collectively.

In the simplest formats of exchange the genus are either identical

or discrete i.e., it is either homogeneous or heterogeneous type of

exchange and no third format is probable; the hybrid exchange is

possible when minimum two objects are there on one side of the

equation at least e.g., if gold is transacted with “gold plus silver”.

In such a case, the previously explained conditions shall apply to

homo-exchange-values on two sides of the equation and residual

exchange-values shall be transacted as per recent order, so there

appears no trouble even if hybrid type of exchange situation is

faced, the hadith regulates precise rules for both simple and hybrid

formats. In this context, we don’t need to repeat the homogeneous

factor of hybrid but to explore the discrete format only, this in fact

is the outward appearance of exchange here i.e., heterogeneous.

A discrete form means “gold in exchange of silver, wheat, barley,

dates or salt”, “silver in exchange of any of other five” or “one in

exchange of any one from other members of genus family”, these

are explicit meanings of “if the genus differs”, whereas its implied

demand is compelling more than expected i.e., implicitly, it says

the identification of objects is must simply because no distinction

in genus can be established unless objects are not identified. This

implied condition has principal significance internally consistent

31In hadith #1569, although the sequential order of this diktat comes after “hand to hand” command

but since “hand to hand” also applies to earlier conditions, therefore order of this diktat is raised here in the order list of explanation.


from start of tradition to its conclusion, will discuss its place when

discussing “hand to hand” in next part, though here we may stay

around minimal deduction that ‘objects must be identified’ in

heterogeneous exchange. In principle, if heterogeneity can’t be

established for unidentified things, so should be the homogeneity

that is – ‘objects must also be identified’ in case of homogeneous

exchange. Considerately in above stance, we have a general rule

from the tradition asking that for stated transactions, objects must

be identified for exchange (homo or hetero).

The previous conditions of “like for like” and “equal for equal” are

not applied in case of differing objects; however it still upholds the

“hand to hand”’ condition, we may quickly go over the reasons for

the exclusion of previous two conditions in case of heterogeneous

exchange; here we may recall, the ‘heterogeneity or homogeneity’

is wanted only in commodities that are stated in traditions or in

the extended list that we theorized as a “genus family”.

Obviously, it looks natural once genus are distinctive, the order of

“like for like” is not practicable because ‘organic distinctiveness’

existing in genus by nature, is the basis of such classification and

this categorization is explicitly recognized in hadith32, so when this

distinction is established at the root then there is no question of

‘likeness’ condition; accordingly the prophetic message maintains

its “internal consistency” by this omission. If you think back to the

‘valuation’ feature we introduced while discussing “like for like”

diktat, what about its relevance and application when likeness is

not sought here? Does this mean the theory of adding ‘valuation’

characteristic is proven wrong? Not really, ‘valuation’ is an issue

of transaction and not particular to commodity; it is applicable to

genus or commodity but also to other elements and dynamics of

transaction e.g. skills and labour of an artisan used in making an

object of exchange, the treatment of commodities causing some

value addition like when rice, wheat, citrus fruits and other items

are refined resulting in their higher exchange-values. These are

the factors of ‘valuation’ applicable to any object of exchange and

present regardless of ‘genus likenesses’ wanted or not, hence the

introduced ‘valuation’ premise is not redundant.

32The explicit sense when the tradition says “if the genus differs”


In the very next part of the current diktat, the rights of ‘valuation’

are assigned to the participants in exchange when the tradition

says “sell as you wish”, the ‘valuation’ aspect is offered even when

genus are different. Therefore, there is no extra-contextual reason

theorized (as per our set rules) in new added feature of ‘valuation’.

Remember, such freedom was not given in earlier exchange form

we concluded and hence proves our logical judgment there.

Next, we need to see what privileges the participant may have in

this assigned authority of ‘valuation’? A simple logic shall get us

its answer i.e., prophetic messages are non-contradictory – that

we believe, therefore whatsoever is established for earlier part of

the tradition can not be overruled by this authority given here. It is

already expected that the focal concept of “equal for equal” was

the enforcement of “valuation standards” defined by society; thus

anything that is left after fulfilling first obligations may comprise

the privileges of the participants.

Other than logic, the meaning of “sell as you wish” shall imply the

‘individual or personal valuation rights’. If society declares that

one dinar equals ten dirhams, no individual has the right to assert

his own ‘valuation’; conversely if such exchange relation is not set

by the social order then people are naturally free to use their own

‘valuation’ perception. Moderately thus, we may conclude that for

exchange of heterogeneous objects in “genus family”; the rights

of ‘valuation’ are to participants if not defined by the social order.

This diktat actually brings forth another angle of deliberations i.e.,

‘the reality of exchange types and their handling conditions’, if we

organize a diagram to depict all fundamental types of exchanges

for the “genus family”, the count is four since we have identical or

discrete genus; two for genus and other two for species; the types

of exchanges as declared in subject ahadith are intra-species and

inter-genus, other types of transactions possible in ‘genus family’

but not declared explicitly are inter-species and intra-genus. The

last one i.e., intra-genus will essentially have either intra-species

or inter-species form only, therefore just three types are actually

possible, two are discussed in the first hadith but the third type i.e.,

inter-species is not talked about here. If a prophetic evidence for

this type is also included in our efforts, it will complete the entire

spectrum of elementary exchange transactions, illustrated below.


In this context, let us include the tradition cited above relating to

Bilal (RA) describing inter-species exchange type:

Narrated by Abd Sa’id, Hadith #1589, Vol 2, Muslim33

33 Ibid. P.1007 vol. 2, Arabic to Urdu compilation of Sahih Muslim by Moulana Aziz-ur Rahman

““““Genus FamilyGenus FamilyGenus FamilyGenus Family””””

GenusGenusGenusGenus (Objects of Exchange)

Discrete Species (Inter-Species)

HeterogeneousHeterogeneousHeterogeneousHeterogeneous (Inter-Genus Exchange)

HomogenousHomogenousHomogenousHomogenous (Intra-Genus Exchange)

Identical Species (Intra-Species)

Homogeneous

Homo-Species

Heterogeneous

Either Species

Homogeneous

Hetero-Species

Gold

Silver Wheat

Barley Dates

Salt

Others

In hadith # 1569 & 1570 In hadith # 1569 In hadith # 1589

Entire Spectrum of Elementary Exchange Transactions



Abd Sa'id reported: Bilal (Allah be pleased with him) came with

fine quality of dates. Allah's Messenger (may peace be upon him)

said to him: From where (you have brought them)? Bilal said: We

had inferior quality of dates and I exchanged two sa's (of inferior

quality) with one sa (of fine quality) as food for Allah's Apostle

(may peace be upon him), whereupon Allah's Messenger (may

peace be upon him) said: Woe! it is in fact usury; therefore, don't

do that. But when you intend to buy dates (of superior quality), sell

(the inferior quality) in a separate bargain and then buy (the

superior quality). And in the hadith transmitted by Ibn Sahl there

is no mention of" whereupon".

Brief Inference in our context:

The external consistency available from above tradition reveals if

species of genus are distinctive (i.e., intra-genus and inter-species

exchange), almost certainly their exchange-values or ‘valuation’

aspects shall be different because of respective uniqueness, and

thus a ‘value judgment’ is required to settle the transaction justly.

The rights of this assessment are not assigned to the participants,

individually or mutually, rather a mediator is placed in between to

assert neutral and fair exchange relation between unlike objects.

The prime reason for this via route is the absence of ‘proportional

value judgment’ in terms of exchanged objects, in relation to each

other. Even if ‘exchange-values’ are assigned to these objects by

the social order, the relation between assigned-exchange-values

is required to be defined for the purpose of economic justice. This

approach is well summed up in calling it as “marking to market35”

procedure.

The point in the mention of entire spectrum of such transactions is

that the feature of ‘valuation’ is not neglected in traditions, the set

conditions for different exchange types have corresponding facts

in human intuition and throughout the spectrum of transactions

the purpose appears is – economic justice, where the contractual

aspects are intelligently handled by imposed conditions.

34 Online Reference - Muslim :: Book 10 : Hadith 3871, web link

<http://www.searchtruth.com/book_display.php?book=010&translator=2&start=3871&number=3871> 35 El-Gamal, Mahmoud A. Web link <http://www.ruf.rice.edu/~elgamal/files/riba.pdf>


4. Diktat 4. Diktat 4. Diktat 4. Diktat –––– Be Exchanged Hand To Hand Be Exchanged Hand To Hand Be Exchanged Hand To Hand Be Exchanged Hand To Hand


be exchanged hand to hand (yadan bi’ yadin)

Related queries :

1. What is the “rational significance” of hand to hand condition?

2. What is the “functional equivalent” of hand-to-hand?

3. Does this hand-to-hand directive apply universally prohibiting any time involving transaction of all fitting objects under the ambit of subject ahadith e.g. silver, gold and money in loan contracts?

The contract of sarf laid emphasis on recent condition more than it

does on any other conditions stipulated in ahadith accentuating its

legal significance. The influence or importance of the decree can

also be envisioned from a tradition of Umar (RA), “From your hand

to his hand. If he asks you to wait behind the wall (of a room), do not

wait for him, and if he jumps from the roof, then, jump with him.”36

Certainly, hand-to-hand condition has its distinctive connotation

understood differently within piety and liberal reasoning, such as

“exchange at once” or “in a reasonable session” or “the technical

possession of modern age” etc., all such positions are legal forms

to enforce the diktat, which in any case is required to execute the

command, however as usual these legal opinions do not offer a

clue for the obscured purpose of the command i.e., why it is that

hand-to-hand is given so much substance or what is the reason in

enforcing the condition of simultaneity? In a roundabout way,

what happens if some delay is encountered? What does delay do?

Where to find the justification of disapproving the delay i.e., in the

intention, in commodities, in exchange or else?

A logical resolve of these queries will form rational significance

of the diktat internally consistent with definite message of ahadith

that in fact is more important than any legal position, to be more

precise, it is actually required to form an accurate legal position.

The issue of simultaneous exchange has remained a challenging

task for earlier scholars as well compelling great thinking minds

to assume and go for extra-contextual justification in search of its

36 Ibid. Article 7.2.1 - Quoting Al-Sarakhsi


underlying principle that prophetic message might have destined.

The enormity of challenge and its stress on thinking minds can be

assessed from the requirement of justifying a credit sale, say of

wheat or salt against gold or dinar, in a situation when the hadith

demands that even if commodities differ, the exchange has to be

simultaneous. The credit sales were practiced in those days, and

there was no comprehensible reason or objection that such credit

sales should have been prohibited, it was neither making a sense

to them nor some one in this age would agree to. That was a real

paradoxical situation, it is thus they landed in grave syndrome of

“estimation methods37” that is – in the times of Prophet (SAW), the

estimation of gold and silver were by weight and estimation of

other four commodities were by measure, so they derived a feeble

legal position in the diversity of estimation methods to allow the

sale of four items on credit against gold/silver or dinar/dirhams.

Since, six commodities were assumed as the subject, so they also

looked legal substance there, but such is not an argument, it’s a

legal position because no ‘corresponding rationality’ is on offer to

understand the reasons in employing this technique, what makes

the difference if methods of estimations are not the same? Some

methods are replaced, now wheat, barley, dates, salt are sold by

weight instead of measure so the previous position has already

lost its basic differentiation if there was any, and insisting on this

reason of legality would be a double jeopardy.

The other truth is, despite having challenges on intellectual front

to solve contemporary issues which are pending because existing

interpretation or law is not sufficient to handle those challenges

of transformed intellect; the modern scholarship is hardly willing

to address concepts of existing laws. By the high merits of Islamic

thinking, it is not piety that arguments are not noticed but ignored

just to uphold a position which does not offer an argument; this in

fact reflects rigidity and incapability of modern intelligentsia and

indicates elemental reason of decline. Is it not an uphill task that

we have no financial or monetary policy? Despite interest-free

fixed-term loans are illegal by law but rampant, is it not an issue?

People are not for law; law is for people, if people are changed in

their intellect, then man made law may be changed if not suited.

37 Ibid. Article 5.3 The sub-principles in Sunnah


In this age of widespread economic thoughts and deliberations,

who can defend the contract of sarf for its two problems at least,

firstly, how to justify neglecting ‘value addition’ in an artifact that

consumed skills and labour while hadith does not order like this?

Secondly, why people shall not undertake fixed term interest free

loans, is it not just an implication of derived rules which have no

second evidence in primary sources except the derivative? Where

are the “corresponding rationalities” answering the law positions

realistically to satisfy the nature and the common-sense? Though,

these are not new queries, and as far as my limited knowledge is

concerned, whenever such types of queries are raised, these are

treated by authority and not by reason or if by any reason that is

not convincing. Such are the tribulations emerged because of the

delusion on Riba, an exact concept of which is still undecided.

The only ray of hope is in attitude to improve by logic and reason,

ready to absorb evolved knowledge and experience, and seeking

improvement in harmony with nature and human instinct. We can

surely move forward if we show such acceptability, this discourse

with its line of argument is an effort by reason to resolve issues

we are facing i.e., for the interpretation, there is nothing wrong

rather an enhanced thinking conforming to our contemporary age

that if we grasp “the exchange (homo or hetero)” being the subject

in place of commodity, to apply economic thinking of “valuation”

in transaction instead of just restricting to quality of commodity,

and seeking equivalence in “complying standards of valuation”

as a replacement for equal weights or equal measures. All such

modifications do not imply that the earlier thinking is rejected in

any way, it is not. We are here to say all this just because of those

great minds who taught us as how to think and handle issues, all

credit goes to them for their efforts providing us a foundation to

improve as they expected.

The approach is to translate the sense using current intelligence

and philosophy that is acceptable to eternal divine and prophetic

wisdom, with the intention of rectifying practical obsolescence of

existing laws. This exactly was the approach of those great minds

who gave the law first as all of them utilized the knowledge and

practices then in use, it was the natural way and still is; argument

(dalil) matters only and that comes from the intellect which reflects

the state of human acumen in any age.


The simultaneity38 is a property associated to events, in our case

to exchange-events; it is also one of the reasons in switching the

subject from commodities to exchange-transaction, commodities

can’t hold this condition of being in the state of simultaneousness,

only events can do. The diktat demands to associate the condition

(i.e., property) of simultaneity as an order for exchange-events to

happen at the same time in one reference frame.

In its literal sense ‘simultaneity’ will be exact when the difference

of time in exchange-events is zero, that is almost impossible for

humans but only by chance, so a natural demand arises for the

approximation of this property to define a ‘time window’ that may

be considered suitable as a ‘reference frame’ for ‘simultaneity’; it’s

not a new approach rather every one had faced this issue to settle

in justifying the diktat, for instance the earlier mentioned sense of

“exchange at once” or “in a reasonable session” or “the technical

possession of modern age”, all do refer to this approach, that is to

approximate the ‘reference frame’ where the lone factor of time is

employed as an ‘independent variable’ to decide its practicability.

The use of time factor is suitable for practices, correlates to legal

implementation of the decree; however it does not help in finding

the corresponding rationality of aimed simultaneousness which is

our principal query here, for that very reason, we have to find and

include another ‘independent variable’ in defining the ‘reference

frame’ of simultaneity. In fact, this lacking is a cause of differing

positions on the matter since no other criterion or parameters are

available to define the extent, size or limits of the ‘time window’.

The lively theme of interpretation is revolving around the concept

of ‘valuation’ which we estimate as an indispensable factor for all

exchange-transactions, and since ‘simultaneity’ is directly related

to these events as well, hence next independent variable that we

are searching for, has its highest probability in ‘valuation’.

As established, we have a basket of few “mediums of exchanges”,

here for the purpose of simplicity, let us reconsider the basket as

containing various currencies comprising present and past ones,

this will not change our argument or the sense we are projecting.

38 In its extensive definition, simultaneity is the property of two events happening at the same time

in at least one reference frame. <http://simultaneity.askdefine.com/>


From the period of metal-based to localized forms and now paper

money, the legal assignment of value to its units has never been

permanent i.e., the individual currency units in any scheme never

had an endless or constant relation between its assigned-value

and corporeal composition, that is, exchange worth of a currency

is changed by changing its internal formation. We need referring

to this common observable fact frequently, so for the purpose of

simplifying the practice, let us coin a new term here representing

internal vvvvariation iiiin eeeexchange wwwworth of currency as “EEEEndoviewndoviewndoviewndoview”.

In the era of metal based monies, endoview in functional monies

were occurring when coins were minted and re-minted by varying

its weight or by adding impurities for any good or bad reasons,

despite endoview, most of the times the coins were carrying same

face-values or assigned-values that existed before the alteration

occurred in their corporal makeup. Then it is also a historical fact

that in bi-metallic money regimes the exchange-rate say between

dinar and dirhams was always varying and never had a constant

relation between them. In earlier context, that was the “ExoviewExoviewExoviewExoview”

experience of money (the external variation in exchange worth of

currency). Today, fiat currencies are devalued or revalued as the

regimes want it to do (endoview trend), again for any good or bad

reasons, not of concern here, and these regimes define exchange

relation for currencies of other origins (exoview practice).

Whatever the represented forms of money are, its worth is set by

assignment only and the authority who does this, do also have the

rights to effect endoview and exoview aspects of the currencies it

manages, regardless of the use of this prerogative by authorities

who might be claiming any reason(s) justified or unjustified that is

not of concern here, the fact remains, the endoview and exoview

actions are ever present and people accept them as an obligation

and readjust their judgments and dealings accordingly because of

their inescapable relationship with society and governments.

The only difference in present and past practices is the frequency

of exercising the prerogative by authorities i.e., say for instance,

endoview in coins was not frequent but in years and decades, and

exoview mostly set by markets was also less frequent then today

when we see these privileges are being exercised time and again

between each dawn and dusk by the authorities and the markets.


The endoview strategies like re-minting, revaluation, devaluation

or else, are put into effect across the board in financial jurisdiction

served by any functional money therefore no relative erosion of

exchange-value is expected in terms of currency itself owing to

the reason that the reworked units of money are assigned their

previous face-values i.e., a dinar remained a dinar and a rupee

remains a rupee, one may call this implementation by any name

like ‘tax’ or whatever, the matter of fact is, these practices have

been used in the pretext of monetary and economic management

primarily and since applied evenhandedly to all therefore mostly

acceptable. It is up to the integrity and sensibility of governments

to use this tool in the interest of the public but people in any case

have “to respect the valuation standards” defined or re-defined. In

an absolute single currency jurisdiction, the endoview application

‘will not affect any exchange-value relation whatsoever’ implying

that no exoview incident of currency may occur, nevertheless, if

we perceive the entire state of affairs of endoview phenomenon

in multi-currency setting or its subsequent effects, we may realize

that this privilege must only be available to socially responsible

governing bodies working for public-centric policies.

An endoview occurrence in one currency is an essential cause for

an exoview incidence if and only if there are other currencies also

functioning in the same jurisdiction; exoview have other possible

causes as well e.g. demand and supply circumstances of working

monies in the territory etc. Irrespective of its cause, if exoview is

happened even in one currency only, it has the potential to affect

‘every other exchange-value relation’ inside the jurisdiction.

The purpose of stretching above arguments to extreme situations

of absolute single currency and then multi-currency environments

is to draw a parallel of two obvious situations as portrayed within

noble evidence, though there is a lot more in between these limits.

The logical implications of exoview occurrence are serious thus if

a real concern of people is pursued, it is the exoview occurrences.

If exoview is the concern of people then its frequency is the most

relevant ‘independent variable’ to define the ‘reference frame’ of

simultaneity simply implying that the commanded simultaneous

transactions must be concluded before next transient phase, that

is – before any transformation occurs in exchange-value of any of

the currency (objects) that are being exchanged (homo or hetero).


The time interval (i.e., T=1/Exoview Frequency) set by frequency is

the maximum allowable extent of ‘time window’ not to be violated

in order to maintain the legality of hand-to-hand diktat, indicating

any position is a valid position within the realm of ‘time window’.

This inference in fact corresponds to common human nature i.e., if

the intention of people is to settle the matter in equivalence with

immediate effect, then leniency of time period that does not inflict

loss is acceptable to them if they don’t possess other reason(s) of

urgency. Moreover in particular, this deduction also coheres with

our basic theme of ‘valuation’ applicable to all fundamental forms

of transactions stated in cited ahadith where prophetic messages

revealing explicit common purpose of ensuring the deliverance of

precise equal exchange-values to the participants. If delay in the

settlement of involved objects occurs beyond this ‘time window’, it

will cause inequality on delivery by external reasons of exoview

incident. In this context of arguments, answer to the first query is,

the ‘rational significance’ of “hand-to-hand” diktat is to protect the

participants (in transaction) from (economic) externalities39.

The answer to second query can also be offered from previously

stated arguments i.e., the ‘functional equivalent’ of hand-to-hand

diktat is – the function of exchange complying its rationale import

must be completed within defined ‘time window’ by any practical

customary technique.

The remaining query is relatively sensitive since it addresses an

issue of daily life practice which is against the law but not against

the nature so to find the narrow line causing the breakage of law

is a touchy bit naturally. Nevertheless, if we observe the set rules

of interpretation and attempt to find its answer from thematic

notion of ‘valuation’, it shall work positively.

As argued previously that ‘valuation’ is an indispensable factor

required in transactions, shall it mean if ‘valuation’ is not possible

or proper then the transaction will not occur? I think, it is not so,

the ‘valuation’ is a prerequisite for the purpose of delivering exact

equivalent of exchange-values in a mutual affair, this reciprocal

event in short is a contractual matter to be governed by the norms

of society and the perception of people, however, an impossibility

39 In economics, the externality may be defined as an indirect effect on the participants (in our case)

of exchange transaction that is caused by outside economic agents not involved in the transaction.


or inadequacy of ‘valuation’ that is – the ‘uncertainty of valuation’

may not stop people from entering into transactions because of

human instincts (fitrah) purporting either good or bad reasons for

their involvement, for instance, good reasons like helping some

one at the cost of uncertainty, bad reasons are obvious too since

‘uncertainty of valuation’ is the only reason that actually tempts

people to speculate and gamble. Thus any transaction having an

‘uncertainty of valuation’ becomes a simple matter of ‘intention’,

another Islamic legal maxim - “matters are determined according to intentions40” based on a famous hadith, has special significance

here, asking to differentiate between two intents, that is - how the

spheres of ‘relevant intentions’ are to be defined in principle?

Let us rewrite – the ‘uncertainty of valuation’ implies impossibility

or inadequacy of valuation, this feature may be present, for some

reasons in concurrent exchanges, however it’s an integral aspect

of every future transaction; we have several noble evidences from

primary sources helpful in comprehending the issue from subjects

of Riba, Qard, Dayn, Salam etc., or legal handling of issues by great

Fiqh scholars setting rules for contracts like Modarabah, Musharakah,

Bai Salam etc. though we may disagree with derivative outcomes on

the subject in some respects that might be basic or otherwise, for

instance, the noble prophetic tradition on Salam is a pertinent case

to study the uncertainty of valuation where in my humble opinion

the relevant prophetic evidence is a ‘rule’ in effect rather than an

‘exception (rukhsah)’ as considered in Fiqh, nevertheless that is not

a matter under discussion here. The uncertainty of valuation in its

absolute continuum can be divided in two complementary parts

of gharar and risk in my perception i.e., gharar is an uncertainty of

valuation rationally unacceptable, and risk is the one acceptable;

the rationality speaks of itself as originating from belief, intellect,

knowledge, experience etc., and must be the principle of division

in affair with uncertainty of valuation for its acceptability (as risk)

and unacceptability (as gharar). This perspective is consistent with

what is prohibited like speculation, gambling, selling or buying of

“unborn calf in its mother’s womb” or “the catch of the diver” or

“the birds in the sky“ and what is permitted e.g. investing, selling

and buying with advance or deferred payments etc., not any such

matters escape of this attitude towards ‘uncertainty of valuation’.

40 Article #1 <http://www.islamic-world.net/economics/99_sharia_maxims.htm>


If ’intention’ matters in ‘uncertainty of valuation’, will it not matter

when ‘certainty of valuation (exact exchange-values)’ is sought in

subject traditions? It sounds like a foolish question and that it is,

since no transaction can take place without having an intention

and already quoted the undisputed maxim above, but the reason

in raising this question is to highlight the fact that there are two

hemispheres of ‘valuation’ where intentions have to be different.

The subject ahadith are not referring to both intentions as well that

is very much clear and there is no contextual evidence for such

deduction rather the ‘certainty of valuation’ is assured by all ways

possible which implies that any transaction having ‘uncertainty of

valuation’ can not be covered within the realm of these traditions.

The tradition of Umar (RA) cited earlier and all Prophetic traditions

of similar context verify without omission that the ‘intention’ of all

such matters is ‘to settle in equivalence (certainty of valuation)’ of

two exchange-values, Prophet (SAW) clearly prohibited41 selling of

gold with gold or silver with silver if anyone of the two is absent,

then in another tradition42 with similar context as of subject ahadith

the selling of silver with gold is prohibited with deferment. What

else could be the reason for these prohibitions if the uncertainty of

valuation at settlement is not?

A credit price (say of a camel) agreed (say) in dinars is payable by

equivalent dirhams at the time of payment, similarly, a qard hasan

obtained in one currency can be settled in another currency with

equivalent of the first, these are established provisions allowed in

Fiqh which are very much explicable. Since the exchange-values in

these cases are defined and will be delivered exactly without any

disparity i.e., an exact liability is discharged just in another form

of prevalent currency which is acceptable by any standard. What

else could be the reason for these provisions if the certainty of

valuation at settlement is not?

The purpose of above deliberations is to emphasize that primary

decisive human factors in a transaction are intentions, valuation

and rationality, all the rest are relative subjects in reference to

41 Hadith # 1560 Vol.2 - Arabic to Urdu compilation of Sahih Muslim by Moulana Aziz-ur Rahman

Online Reference - Muslim :: Book 10 : Hadith 3845, web link <http://www.searchtruth.com/book_display.php?book=010&translator=2&start=3845&number=3845>

42 Ibid - Hadith # 1578


these essentials, i.e., gold, silver, dinar, and dirhams or concurrent

and delayed settlement, all are correlated issues to be seen in the

context of these fundamentals. A consolidated summary of above

scheme of thoughts may be portrayed as below:

This is an all-inclusive conceptual premise for a transaction. The

resulting domains of permissible and impermissible are definitely

subject to some conditions that might be explicit or implied while

some objects are required for the purpose of fulfilling those terms

of domain. We have discussed explicit conditions so far and now

let us include briefly the implied condition that we showed earlier

while discussing “if the genus differs...” diktat, i.e., objects must be

identified for exchange (homo or hetero). The idea of identification

relates to the argument of ‘valuation’ not reliant on ‘ownership or

possession’ which was subsequent feature made primary through

inadequate conception of “hand to hand” order; the ‘identification’

notion primarily encompasses the previous diktats as well as the

current one and signifies that it is not always necessary to own or

possess things of trade (e.g. agency idea) but the rights of trade

(ownership included) where existence and specifications of the

article of trade are the real conditions for a thing to be identified.

� � � � � � � � � � � � � � � � � � �� NATURAL ��

FORCED � � � � � � � � � � � � �

� � � � � � � � � � � � �� ! � " � � #RISK ��

GHARAR � � � � � � � � � � � � �$ � " % � � � !Equality Inequality Acceptable Unacceptable


The legal sense of two concepts is poles apart, identification will

not conflict with any thoughts of primary sources because it also

includes ownership and possession logic when required but it has

far reaching legal implications if compared to unnecessary legal

justifications we see in contracts based on prevalent laws. This is

a definite improvement from simple ownership to identification of

objects that perfectly coheres with the projected scheme however

no further discussion is sought at this moment.

By now, we have concluded that the subject ahadith encompassing

‘certainty of valuation’ domain only. A loan transaction by nature,

either specifying fixed time period or open time frame, is a case

of ‘uncertainty of valuation’ where intention matters and one may

not have two intents for one transaction. Let us first understand,

briefly, the case of loan from Fiqh; loan (qard) is a sale of currency

with currency with some delay since every sale (or exchange) of

same or unlike counter-values in Islamic Jurisprudence is called a

bay. The format of bay which involves only dayn i.e., dayn bi’ dayn

shapes the contract of sarf and given that Fiqh sets rules therefore

the contract of sarf speaks about the principles for the exchange of

currency and there is no explicit mentioning of ‘loan’ as such in

this contract but when it articulates ‘the counter-values must be

delivered and taken possession of within the session of the contract. In

other words, a condition for delay can not be stipulated43’, enforced by

a second rule of options saying ‘No option (khiyar) can be stipulated

in this contract. The reason is that an option delays the transfer of

ownership and this violates the first condition of spot delivery and

possession’, implies that loans are not permissible with or without

stipulated excess as the condition of simultaneity can not be

observed due to delay.

These rules presumes that the goal of participants shall only be to

exchange the objects; any reason or rationality is rejected in very

absolute44 way since the rules do not judge ‘why one may intend

to transact these objects’ which is like ‘you do exchange but do not

43 Article 4.4.1.3 – The Contract of Sarf in The Concept of Riba and Islamic Banking by IAK Nyazee,

yet in another write-up from him the clauses of contract are rephrased but not conflicting. Since I regard Nyazee as one of the most knowledgeable jurist of modern times and rate him very high for his legal (Fiqh) insight on Riba therefore most of my references on Riba are from his work.

44 Possibly because a concurrent exchange of similar objects was considered meaningless or trivial thus indirect conclusion is reached that it is only delay that actually is the substance of prohibition but this may only be an assumption not a reason or absolute conclusion or valid argument.


know why’; Nyazee portrays this deadlock situation excellently by

saying45 “The tradition of ‘Ub¯adah (God be pleased with him) is not

saying that you undertake the transactions mentioned; it is saying that

if you undertake such transactions, then, here are the rules you must

follow”, this exactly reflects the connotation of sarf rules outlawing

loans, simply saying regardless of any intention (like he says: if

you undertake), implying – matters can also be determined devoid

of intentions, but this is a serious inconsistency vis-à-vis the hadith

(inamal aamalo bin neyaat) and the legal maxim quoted earlier about

intentions, therefore we must try to understand this inconsistency

which is different from legal inconsistency. A ‘legal inconsistency’

means ‘a conflict of deduced rules with a primary evidence’46, in

the methodology of Fuqaha, if this happens to be the case then it is

corrected by offering exemption (rukhsah) to the evidence i.e., an

exemption is to undo the reparation that is caused by the paradox

of rules since primary evidence can not be ignored in any case, it

is thus exemption granted for Qard as Qard Hasan which otherwise

can not be allowed as per rules deduced, still justification for this

exemption is required even by guess or strange theorization. It is

imperative to comprehend that correcting methodology (rukhsah) is

applied only to deduced rules for its divergence with the primary

evidence and this technique by itself signifies the possibility of a

judgment oversight at conceptual or theorization level. If such an

omission exists at that level then it had to be transmitted onward

without resolve for the reason that we can not expect from great

scholars that they could have left it unresolved if had realized. The

inconsistent matter of intention that we noticed here above, is of

that sort i.e., conceptual. It has already been differentiated in our

approach where the origin of this conceptual disagreement again

is the same i.e., the issue of subject – commodity or transaction.

There are other conceptual challenges as well relating to Riba and

at least five of them are quite critical in nature that we can argue

with reasonably for their philosophical outlook but it is not desired

here since those are not related to the subject ahadith and I have to

finish this discourse too, accordingly it will be adequate to confine

to one more conceptual argument in our context of loan, that isn’t

a matter of difference with Fiqh rules on loan but the conception.

45 Article 4.8, Page # 71 – The Prohibition of Riba, Elaborated by Nyazee (2009), emphasis added. 46 For its understanding and terminology used in Fiqh.


But shall we or can we try to tackle the conceptual discrepancies

using our current intellect where the intention (if it really matters

to legalism) is not criticism but to recover the coherence lost in the

process of theorization? I think we can rather we should, simply

because the original ideas of primary sources are not restricted to

any age while removing inconsistencies is actually obligatory to

uphold the supremacy of primary wisdom. I don’t see any reason

that forbids undertaking such efforts of reversing a theorization

mismatch; the only requirement is to establish that there exists a

conceptual problem. Legal positions, deduced rules or principles

are secondary to concepts and become invalid if a real problem

in their concepts is identified. Let us try one such case of concept.

In the early Fiqh or you can say the original concept of riba al nasiah

as quoted or defined by Nyazee, conveys, ‘riba al nasiah, means Riba

arising out of delay; excess from the benefits of delay; the benefit

of Riba al-nasiah goes to the borrower47’, these perceptions tell the

whole hypothesis about the branch of Riba – quite shocking rather

distasteful and very disagreeable. First of all, it’s not defined what

a benefit is? Though we all know it is an advantage of some kinds

not just one kind. The concept of riba al nasiah is not identifying any

particular kind of benefit but all benefits with only distinction that

the cause of such benefits is delay and this effect (of the cause) is

certain without doubt because the statement is absolute in nature

giving no option to consider otherwise. There is nothing as well in

other essentials of a loan transaction i.e., intention, money itself,

and the transfer of ownership of money from lender to borrower,

that gives a clue of the kind of benefit that the borrower will enjoy.

If Riba is an evil, which it is, then some evilness is must to identify

emerging by this act of loan where we see no means to detect the

same from the dynamics of the transaction. It is not enough to say

that benefit is Riba, if some benefit goes towards the borrower, so

what? There is no corresponding rationality observed or common

for this definition of riba al nasiah. This may be the reason that later

scholars disowned the early Fiqh concept and replaced it with their

own labeling of “riba al-Quran”, their reasons of rejecting and then

renovating the concept are not known, at least to me. The rukhsah

justification given for qard hasan due to uncorroborated riba al nasiah

concept is also not convincing as well, that is – the benefit toward

47 Page # 53, 52, and 56 – The Prohibition of Riba, Elaborated by Nyazee (2009).


borrower is considered as gifted or donated to him by the lender

and since a gift can not be reclaimed therefore period may not be

fixed, hence qard hasan (open time frame loan) is permitted while a

loan with fixed time frame is not permitted, here the stipulation of

time period is considered as a call for the redemption of the loan.

If Riba is an evil then how its evilness will be removed by gifting or

donating? Conversely, if this act of gifting or donating the evil is

acceptable or rational then Riba will lose its meaning in effect and

no defense line would work then. In fact, these concepts and logic

are not consistent with other concepts of loan and charity that are

enlightened in other traditions of Prophet (SAW), for instance, “qard

given twice is like sadaqah (of the same amount) given once”; then

in another tradition, Prophet (SAW) said, ‘sadaqah will be rewarded

by ten times its amount, while qard will have a reward of eighteen

times’.

The above cited prophetic evidences clearly indicate that the act

of qard (loan) is superior than the act of sadaqah (charity); economic

intellect can understand this better than a mere legal mind; loans

are given to active or potential economic agents (as implied from

their promise to return), means they produce value wanted by all

to consume, while in case of sadaqah (though is a good act too), the

probability of its recipient for getting involved in producing is less

than becoming a mere consumption engine of value produced by

others, accordingly prophetic wisdom screening economic logic of

the acts. Does it make sense to attract or convince legal minds?

Then, if we inquire the economic justification of a ‘fixed term’ loan

contract, that is commonsensical too; firstly, when a lender gets a

promise of payment for his money within a given time frame – the

common human nature (fitrah) indicates that a fixing of period will

increases the probability of loan commitments in the society and

this will mean more economic activities in the economy; secondly,

both lender and borrower can plan better for their other activities

related to money and become more rational and responsible.

A lot can be said on the positive economic sense of loans science,

but the absolute negativity attached to loans (via riba al nasiah) is

neither final nor convincing; justification of rukhsah is hypothetical

and not convincing too; both “old Fiqh” concepts are inconsistent

with the optimistic perceptions of above prophetic evidences.


The sole reason for the exclusion of qard (loan) and the innovation

of qard hasan is the initial idea of uncorroborated riba al nasiah which

has its Sunnah evidence in subject ahadith chiefly the “hand to hand”

diktat. Though, succeeding scholars disowned the early concept of

riba al nasiah and tailored its sense from concealed to stipulated

kind of excess however they did not questioned its manifestation

in the contract of sarf which is based on concealed benefit. In other

words, if riba al nasiah is the “stipulated excess” then no stipulation

of excess in a ‘loan contract’ will mean no Riba in it, and the ‘fixed

term’ reason of rejection will not be relevant then. The “stipulated

excess” defining feature for riba al nasiah is identical to the original

Fiqh definition for riba al fadl (excess through estimation or qadr48), no

substitute concept is offered for new legal position of riba al fadl but

categories of Riba are retained at the cost of rationality, why then

people will not be confused? The situation is - the contract of sarf

is based on early theorization of Riba, which was modified later on,

however no subsequent amendment in the contract of sarf done to

reflect that change – this inconsistency exist as of today.

If current economic intelligence is employed, we may resort these

issues harmoniously, our belief suggests - it was only the absence

of corresponding rationality in theorization process conducted by

great Fiqh founders which forced them to take the piety thinking

route of banning the doubtful because of the severe commands in

primary sources, a proof for this argument is the adjustment done

by following scholars, however for reasons, they also could not do

full reparation task. The matter is serious; people want to believe

in law but not unbelievable law, it is imperative to recognize that

people don’t know and don’t believe these positions even exist. I

don’t remember exactly but it is long time since I am inquiring the

people from varied walks of life asking them to respond - if they

conduct fixed term loans, that is not allowed in Islamic law, and

the responses usually received are of kind – you must be wrong; it

can not be like this; don’t say silly things about Islamic law; it’s

not engineers’ task to ponder on Islamic law; even very learned

people who have quite reasonable knowledge of religion, do not

believe this. One thing is common in all responses that no one is

willing to believe if the implications of rules described in the

contract of sarf are banning ‘fixed term loans’.

48 3.1.1 “Excess through qadr (estimation)” in “The Concept of Riba and Islamic Banking” by Nyazee


There must be some philosophical base for any legal viewpoint or

a legal system; we believe ‘valuation’ as the philosophical matter

of transactions that we find in all noble traditions persistently, we

learned this by transformed economic intellect of this age which is

different from the simple concept of equivalence of previous age,

certainly the reason of this update have its roots in our changing

of the subject from commodity to transaction. A transaction must

have an intention that shall be accounted for in a judgment, while

valuation has two exclusive spheres of certainty and uncertainty

and since the purpose of subject evidences falls in one of the two,

therefore the other is irrelevant. Hence, the answer to third query

is – “hand to hand” can’t be applied universally to both spheres of

transaction’s intentions and does not cover a loan that is a case

of uncertainty of valuation.

For above two parts of the text (matn), the abridged positions are:

The condition of simultaneity (hand to hand) is quite challenging,

its ‘rational significance’ seems to protect the transacting parties

from (economic) externalities. Until now, there was no reason or

clear mechanism in Islamic jurisprudence to define a legally valid

‘time window’ for this condition, we introduced exoview fact as its

reason and its frequency as a mechanism to defined the same. In

previous diktat “if the genus differs…” it is comprehended that an

‘up to date’ valuation (i.e., exchange relation) is necessary due to

exoview effects in a multi-currency setting. Since, we changed the

subject of ahadith to transaction which is an intended act, therefore

it’s required to identify the intention applicable to these traditions,

evidently it is the equivalence or the ‘certainty of valuation’; then

we argued, the ‘uncertainty of valuation’ can not be covered in the

textual provision of subject ahadith. We also argued that primary

decisive human factors in a transaction are intentions, valuation

and rationality, while all the rest are relative subjects in reference

to these essentials hence the previous conception on commodities

becomes irrelevant in our theorization process. We discussed the

uncorroborated concept of riba al nasiah as available in early Fiqh to

demonstrate next that there exist no corresponding rationality for

the concept which was although modified by later scholarship but

its manifestation in the contract of sarf was not adjusted. There is

no solid reasoning to prohibit ‘fixed term’ in a loan contract and

people in general don’t know/believe such binding of Islamic law.


5555. Diktat . Diktat . Diktat . Diktat –––– He who paid extra….He who paid extra….He who paid extra….He who paid extra….49


He who paid extra or asked extra, in fact dealt in usury.

Related queries :

1. How to define which extra?

2. Extra, even if agreed mutually, will it be Riba?

3. Is Riba here intrinsically different from Riba in a loan?

The matter of excess or extra though apparently looking simple is

full of twists and turns; what is extra or excess that forms Riba is a

continued convoluted subject from start and since the injunction is

stringent in nature thus piety rules here as well, consequently we

notice stances lacking convincing rationalization for ‘excess’ that

may be Riba, for instance, the earlier Fiqh case of riba al nasiah where

the idea of ‘concealed excess caused by delay’ was employed to

define this branch of Riba. The idea of ‘stipulated excess’ was a bit

practical – the one that can be estimated by some way and this is

used to define riba al fadl in early Fiqh and riba al nasiah in subsequent

times. The unified early Fiqh definition of Riba speaks about extra

as “excess in the exchange of two counter-values”, where excess

is indeterminate since it is not yet identified what ‘value’ is? All of

these descriptions of excess are not clear-cut to represent Riba; the

concealed one is almost vague, no detectable concept exist about

this excess; then stipulated excess is not always Riba since excess

is stipulated in valid contracts like Murabaha financing in modern

banking which is approved by current scholarship; then excess is

sometimes conditional too, like in Modarabah, and all of these cited

‘cases in point’ relate to ‘money for money’ forms of transactions.

There is no issue in saying that Riba is excess, collectively agreed

by all in history, but the issue is what sort of excess since all kinds

of excesses can’t be Riba, therefore we need to attach a property

or attribute to ‘excess’ that shall indicate or distinguish – it is Riba.

The earlier attachments of concealed and stipulated descriptions

to Riba are not distinguishing factors for very unfortunate reasons

of having no backing concepts and also don’t possess the faculty

49In hadith #1570 only


to do the required demarcation they seem to be employed for. The

concealed one comes from hypothetical supposition which is

rejected by succeeding scholars perhaps for its unconvincing and

hard to believe argument. The prevalent ‘stipulated’ description is

also lacking in its sense and practical implementation, to clearly

delineate between a Riba and no-Riba transaction, thus at times we

see ‘risk’ brought-in for the purpose of demarcation but that does

not suit everywhere such as in Murabaha financing and risk itself is

another undecided parameter because every loan/debt affair has

some element of risk and then you need to define which risk, why

this risk and not that risk. It is undeniable to say that the issue of

“which excess” is resolved or does not exist and if someone is not

willing to recognize this as an issue or no more an issue, then this

mind-set becomes an issue bigger than the actual issue.

The notions of ‘concealed’ or ‘stipulation’ are not inferred directly

from subject hadith since the tradition only saying “extra“, but by

external reasoning or evidence of practices such as increasing of

loan principal or debt liability, though these are definitely Riba yet

stipulation is not suitable as an argument which limits the span of

prohibition to those practices only from where the idea borrowed

and consequently new practices are excluded of embargo, this is

actually happening in our times. Would it not be better to beg the

prophetic traditions again with our current intellect and existing

practices so that we may deduce a fresh reason to employ as an

attribute to excess, since ultimately, contextual inference is more

convincing and accurate than an extra-contextual hypothesis? It

is possible for us today as we find a corresponding rationality for

this attribute now in our age from current practices that was not

available previously; it is evident and clear that we may realize.

Let us revert again to our central philosophy where transaction is

adapted as the subject of prophetic traditions and ‘valuation’ to be

the indispensable factor to determine right and wrong illustrated

in noble evidences.

Although, we have already discussed the possible correlations of

causes for mentioned transactions when “equal for equal” diktat

was deliberated, however, here it is required to move further with

that understanding to discover the attribute but more important is

to relate it with current practices falling under prohibition.


The tradition says “he who paid extra or asked extra”, here paying

or asking, obviously are the acts of exchange participants; extra

can’t be anything good or bad in itself but the ‘act of extra’ can be;

or we can say an ‘extra’ or ‘excess’ or ‘benefit’ is bad or illegal if

acquired through an act which is bad or illegal, therefore let us try

to find out the important ‘attribute’ for ‘excess’ within acts as seen

by our way of thinking i.e., an act that is not acceptable by nature;

the act that is not acceptable in our theme of valuation too. It may

not be a difficult task since we can identify some commonsensical

rules of valuation in an affair of exchange and then relating them

to all possible exchange formats for the purpose.

Commonsensical Rules for Valuation :

1. Defining exchange-relation among exchange-values is the prime purpose and requirement of a valuation process.

2. In the presence of an exchange-relation, valuation is automatic and none of the participants get the rights of valuation.

3. In the absence of exchange-relation, an internal or external reference or yardstick is mandatory to determine the relationship.

4. When exchange-relation is to be determined, both participants get the rights of valuation.

As a matter of fact, the exchange-value of an item is pre-assigned

or not pre-assigned i.e., negotiable or non-negotiable, this sounds

analogous to Fiqh terms of dayn and ayn, anyhow, if we use these

exclusive exchange-value provisions in all possible combinations

for ‘entire spectrum of elementary exchange transactions’ that

we portrayed earlier under the diktat “if the genus differ...”, this will

give us a simple view of all exchange conditions as below:

Exchange Class

Exchange-Value : Exchange-Value

(NN for Non-Negotiable & N for Negotiable)

1. Intra-Species (Intra-S) NN : NN N : N

2. Inter-Species (Inter-S) NN : NN NN : N N : N

3. Inter-Genus (Inter-G) NN : NN NN : N N : N

Let us first speak about each exchange condition of valuation and

then we will draw a chart of possible situations of exchange.


Commonsensical Exchange Conditions of Valuation :

In a mutual transaction, if the exchange-values are:

1. Intra-S and both are non-negotiable – valuation is automatic since the exchange-relation exists and valuation rights are to none.

2. Impossible condition as species are identical, both must be same.

3. Intra-S and both are negotiable – valuation is automatic since the exchange-relation exists and valuation rights are to none.

4 Inter-S and both are non-negotiable – an external reference is mandatory and valuation rights are to none.

5. Inter-S when one is negotiable and the other non-negotiable - the non-negotiable becomes the internal reference and the rights of valuations are to both.

6. Inter-S and both are negotiable – an external reference is mandatory and valuation rights are to none.

7. Inter-G and both are non-negotiable – an external reference is mandatory and valuation rights are to none.

8. Inter-G when one is negotiable and the other non-negotiable - the non-negotiable becomes the internal reference and the rights of valuations are to both.

9. Inter-G and both are negotiable – internal or external reference is not-mandatory (optional) and valuation rights are to both.

Above conditions illustrate five possible exchange situations (S):

Possible Exchange SituationsPossible Exchange SituationsPossible Exchange SituationsPossible Exchange Situations

(NN for Non-Negotiable, N for Negotiable)

Exchange ClassExchange ClassExchange ClassExchange Class NNNNNNNN : : : : NNNNNNNN NNNNNNNN : : : : NNNN NNNN : : : : NNNN

1. Intra-Species (Intra-S) 1: YES-S1 2:Impossible 3:Unlikely

2. Inter-Species (Inter-S) 4: YES-S2 5: YES-S3 6: YES-S4

3. Inter-Genus (Inter-G) 7: YES-S2 8: YES-S3 9: YES-S5

This idea of totality is available from noble evidences of prophetic

wisdom and the entire ‘certainty of valuation’ sphere is sorted out

in related ahadith handling each possible exchange situation with

natural and commonsensical justification. All situations (S) in red

color signify that “no valuation rights” are to participants and all

situations (S) in green color signify valuation rights are available

to participants, we may see “acts” in this perspective.


Before taking up the matter of acts and exclusive privileges, let us

first talk about the one unusual situation (#3) marked “Unlikely”, it

means two identical negotiable exchange-values (e.g. 1 kilo dates

in exchange of exactly the same kind of dates weighing 1 kilo), it’s

actually the only exchange-form conceived in previous insight of

subject evidence (the sole or key source of ‘riba al fadl’ concept). It

was thus assumed from this inference that since this is a needless

exchange therefore the purpose might be to ban the loans50, in our

current economic understanding, this argument has no appeal.

The rights and no-rights of valuation correspond to freedom and

prohibition of acts naturally, no confusing state of affairs here. If

people get the rights of valuation in a mutual affair then there is

no possibility of Riba in it like in situation S3 (trade) and S5 (barter)

or no likelihood of illegality, however when people don’t enjoy the

privileges of valuation and need to follow an internal or external

reference for the purpose of valuation to define equivalence in an

exchange where ‘certainty of valuation’ is intended, then an extra

or excess causing inequality is only because of disrespecting and

exploiting the situation by force, explicit or implied; previously we

argued logically - there is no understandable justification (natural

or economic) for an economic agent to agree on this inequality,

such justification was a real concern of great Fiqh scholars as well

e.g., “all excess over what is justified by the counter-value51”, and

on Riba issue, several similar statements in Islamic jurisprudence

are notable though lacking precision in definition.

The situations (S1, S2, S4), marked red, not offering negotiability of

exchange-values, are eloquent framework of situations stated in

various ahadith of Riba where excess is not workable but only by an

act of force. Let us recall, the concept here is, ‘extra’ does not exist

actually. Any ‘act of extra’ here is irrational and unwarranted. We

have several expressive lexicon describing this unacceptable act

causing excess or inequality, such as ‘contrived’ or ‘unjustified’ or

‘unnatural’, however ‘forced’ as an attribute suits the most i.e., a

‘forced increase’ or ‘forced extra’ or ‘forced excess’ goes well with

the situation and matching with the negativity in a mutual affair

of exchange. This also summarizes the answer to first query.

50 It may be dubbed as a case “thrown the baby out with the tub water”. 51 Ibn al-Arabi on Riba-al-fadl as reported in famous judgment on Riba by SCP.


The next two queries can be discussed briefly since related points

are already made here above; however as argued earlier we may

realize the corresponding rationality of the prohibition in this age

and time that was not available previously, so firstly let us serve

it briefly though it will require another effort to go in its details.

The prophetic traditions cover the whole realm of exchange forms

that we have shown above; nothing escapes of these situations in

a mutual exchange. Some of these situations were not even dealt

with in Fiqh because of some reasons including that of the subject

(commodity), consequently several existing practices may not be

addressed by accessible ideas in the Fiqh; unfortunately, current

scholarship is inducing further incoherence by handling issues in

careless ways, for instance, the case of forex transactions – the

modern scholarship suggests a ridiculous idea to consider one of

the currencies as commodity and as usual offering no supporting

concept or basis/argument (dalil) for this proposal. How and why?

The answer is total silence; perhaps this is better to keep silent

rather than offering incongruous arguments.

In the famous judgment on the case of Riba with the supreme court

of Pakistan, in conclusion, while describing Riba-al-Sunnah, says “A

transaction of money for money of the same denomination where the

quantity on both sides is not equal, either in a spot transaction or in a

transaction based on deferred payment52“, let us see this statement

of judgment in our perspective.

There are several issues with this statement, like it has nothing to

do with the intention of the participants in exchange, it applies to

all ‘money for money’ transactions and no differentiating factor is

included to cohere with pure ‘money for money’ transactions like

Modarabah and Murabaha financing etc., however at this moment we

may focus the one which, in our perception, forms the underlying

reason of Riba prohibition in Sunnah.

In above cited statement, the transaction of ‘money for money’ of

same denomination is addressed but what if the denominations

are not the same, that is – if rupee is transacted with rupee, that is

included in the meaning of the statement but it does not include if

52 SCP Judgment on Riba – Justice Muhammad Taqi Usmani Part - Conclusion article 242(i) repeated

in the Order of the Court


rupee transacted with dollar, riyal etc. (i.e. second denomination,

value unit, is different) whereas the two ahadith we discussed here

above cover both types of exchanges. In hadith of six commodities,

one form is stated, while from the second hadith of dates relating

to Bilal (RA) the second form is evident, both evidences speaks of

Riba and both involve dates as the object of exchange. The reason

of such neglect is that second evidence is not considered to define

Riba from Sunnah and naturally the definition covers the type that is

obtainable in the former evidence only, this is the methodological

problem in effect.

The neglected evidence says if the qualities of dates are different,

means the species are different, implies the exchange-values are

not the same whether negotiable or non-negotiable, i.e., whether

money or not-money – then an external reference is required to

attain the ‘certainty of valuation’. All fiat monies today are same

genus and since their exchange-values are different so they are

just different species of money similar to the species of dates. Yet,

if impractical minds do not agree with this argument (i.e., all fiat

monies are the species of the same genre) even then the noble

evidences are not lacking, it is said in another hadith53 that gold for

silver must be equal and hand to hand otherwise Riba, same turn

of phrases, same verdict of Riba though genus are different. In our

deliberated context of valuation, either exchange is Inter-Species

or Inter-Genus, both involve Riba in given situations that perfectly

cohere with quoted evidences, this type (i.e., when denominations

are different) has to be accommodated in any definition of Riba

derived from Sunnah and when this kind of transaction is included

in Riba, then equivalence of two different currencies will have to

be defined as well that can’t be just quantitative but as suggested

in neglected evidence that is, through the process of valuation by

asserting the exact exchange-relation between two currencies.

Simple quantitative equivalence in case of same denomination is

true, however for different currencies the equivalence has to have

some reference but not several references that we unfortunately

see in foreign currency business these days i.e., there are three

exchange-rates (official, bid, ask) for each pair of currency where

the official rate is never applied hence equivalence in exchange

53 http://www.searchtruth.com/book_display.php?book=34&translator=1&start=105&number=344


is never achieved as per the demand of hadith. These bid and ask

rates just correspond to ‘who paid extra or asked extra’ mention

in prophetic tradition but neglected in the definition of Riba derived

from Sunnah. Who is not aware of the terrible fallouts/effects of this

artificial and speculative forex business which has surpassed the

real economic activities by manifolds? If some one is still not able

to recognize the prophetic wisdom of prohibition then devil might

had touched him to madness. The front end mechanics of bid and

ask rates is the building block of forex, greed and speculation are

the implicit driving forces of this activity, the extra is forced Riba,

this practice was not existing previously therefore we can’t hold

them responsible for its omission but in this age and time, there is

no excuse for us to neglect the prophetic evidence unambiguously

describing the current phenomenon of forex inequality.

If current Islamic Banking scholars have no argument to negate

above explanation, then they must come up with brave heart and

mind to denounce all foreign currencies business that is based on

different buy and sell rates, Riba from these practices is hurting the

mankind more than the Riba incorporated in loans, even if it is not

more yet it is prohibited Riba, keeping silence is a burden of guilt.

The next are answers to other two queries, in brief:

A mutual agreement for an extra in a concurrent exchange seems

impossible and impracticable, why some one will want to do that?

There is no understandable reason detected hitherto, however if it

be possible voluntarily i.e., without explicit or implied compulsion,

even then it may not become a reason of forming the law because

it is not the common nature (fitrah) of people. The answer to next

query is - no such provision in law is possible allowing extra even

if agreed mutually.

A forced increase or excess in a contract of loan is Riba; stipulated

excess is also forced because it does not exists ex-ante and shall

not be stipulated in a contract, and any such agreement is false

implying an explicit or implied existence of compulsion. There is

no difference in Riba discussed here and Riba in a loan transaction.

The Fiqh types of riba exist because of disjointed concepts in early

thinking, in our understanding, there are no types of Riba and that

we have shown through coherent concepts.


6666. Diktat . Diktat . Diktat . Diktat –––– The receiver and The receiver and The receiver and The receiver and ….….….….54


The receiver and the giver are equally guilty.

In the philosophy of Islam which revolves around nature, divine

and prophetic commands define what is right and what is wrong,

what one can do and what he should not, the whole fabric of any

belief system is woven around such moral and ethical standards;

a violation of these principled judgments is the guilt of actions by

the followers of the doctrine; in human nature, guilt is a negativity

realized by its actor while acting against his nature or belief.

In subject tradition, the demarcation of right and wrong is explicit,

conforming to the nature and economic intellect that we noted; a

moral judgment is given as expected.

Conclusion

No such statement from any Fiqh scholar ever made, claiming – he

has completed the interpretation of divine and prophetic text and

no further thinking is required. Still, the holy text is an object of

philosophical and scientific investigation, definitely the intellect is

enhanced and investigation techniques are improved, thus results

may be different and better, the law may be modified accordingly.

It is undeniable that rules of law vary with the passage of time.

Riba (interest, usury) is an economic matter; an exchange-event is

fundamental to this branch of social science and the focal point of

deliberations. The noble prophetic traditions have addressed all

possible forms of exchange-events while revealing the wisdom of

prohibition of Riba to imply economic justice. The law formation in

Fiqh concentrates particularly on post-transaction piece of justice

and speaks less on the wisdom where the reason of prohibition is.

The contemporary and evolved human intellect is able to see the

noble evidences through a different and better perspective which

offers a coherent view of wisdom and justice.

54In hadith #1570 only

Riba and Hadith of Six Commodities

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