INTEREST
Author: Maulana Sayyid Abul A’ala Maududi
Translators: Dr. Maaz Amjad & Arshad Shaikh
Publisher: Markazi Maktaba Islami Publishers
Pages: 344
Edition: 2015
Price: Rs. 172
Reviewed by SAYYID HAMED ALKAFF
One of the prominent traits of Maulana Maududi’s personality is his deep rooted tendency to challenge the seemingly well-established traditions and institutions. By the third decade of the last century, the institutionalised interest based banking was an accepted fact among the Muslims of India despite the very powerful warning issued by the Holy Qur’ān to those who engage in receiving and giving interest.
ManyMuftis (legal experts) endorsed the interest-based banking as lawful by virtue of living in Dar ul Harb (Land of war).
Maulana Maududi challenged this argument, stating that this line of thought was invented probably in the 3rd/4th century A.H. in the context of international law of war and peace and had nothing to do with the financial and monetary transactions which were and still are subject to the application of prohibition of interest.
An academic discussion took place between him and another prominent Islamic scholar, Maulana Manazir Ahsan Gilani, who was the head of the Department of Theology at Osmania University, in Hyderabad, India.
Maududi insisted that banking operations including of course investments must be governed by the Islamic principle of sharing profit and loss: Murabaha and Mudharaba in business and Muzara’a in agriculture.
After the formation of Pakistan, Maududi continued to propagate his beliefs by answering questionnaires of commissions and questions of people like the Auditor General of Pakistan, Syed Yaqoob Shah, who was bent on differentiating between the interests on commercial and personal loans. However, Maududi proved with his powerful logic that there is no difference between the two in the Islamic law.
Maududi took pains to explain the Qur’ānic ayaat relating to interest. He is the first Qur’ān commentator in the Islamic history who elaborated on the nature of trade and interest.
Maulana Abdul Majid Daryabadi was so much impressed by Maududi’s description that he translated Maududi’s argument on interest into the English language and made it a part of his own Qur’ān commentary.
When General Zia ul Haq was named Pakistan’s ruler, he tried to implement interest-free banking on an experimental basis. But his sudden death put an end to this experiment.
On the other hand, Muslim nations under the OIC (Organisation of Islamic Cooperation), adopted this idea and founded the Islamic Development Bank, which is also going through ‘trial and error’ period until it completely overcomes the difficulties faced by it in developing and investment model free from interest.
Parallely, modern banks are opening interest-free windows and investment tools and products. Their total investment portfolio has crossed 800 billion dollars. This shows that Maududi’s idea is still alive and is gaining momentum despite a lack of a full-fledged interest free banking and investment model.
A lot of intellectual efforts are awaiting the successful transfer of an ideology into a day to day fact of life. Until then, this book Interest will serve as a guide and inspiration to the economists and financial experts to do more.
Turning to the book itself, its first chapter describes the fundamental difference between Islam, capitalism and communism while chapters 3 and 4 reflect the powerful reasoning of Maududi’s idea of prohibition of interest encompassing both negative and positive aspects. Here he appears as ‘Mutakallim ul Islam’ (Logician of Islam).
Thereafter Maududi embarks on narrating the history of the banking system beginning in the 14th century C.E. to the modern age. But he missed the devastating roles played by the IMF and the World Bank in extending near-impossible-to-pay loans to the mismanaged and corrupt countries and then bailing them out by financing fresh loans in order for them to pay their previous loans. This paves the way for the political, economic and financial supremacy of the rich countries over the poor countries which influences the appointment and dismissal of even the prime ministers and finance ministers of the poor countries and forces changing of their tax system. Greece is a living example today.
In the 9th chapter ‘Practical Methods for Reformation’ Maududi has expressed a revolutionary concept of ‘Proportionate Partnership in Profit and Loss whether via Governments or Banks’, a concept which I have developed too independently and have included it in my Qur’ān commentary The Simplified Qur’ān on pg. 119 entitled ‘Equitable Distribution of Risks’.
The last chapter is yet another example of Maududi’s deep insight into Islamic international law and its various aspects including the issue of interest based transactions in Dar ul Harb (Land of War) which Maududi vehemently opposed arguing that the prohibition is universal and unrestricted and has nothing to do with time and place.
It all got started when the ruler of erstwhile princely state of Hyderabad, Nawab Mir Osman Ali Khan, sought legal opinion from Jamia Nizamiya on interest based banking. The fatwa was in favour of interest based banking. However, that fatwa was referred to Al Azhar University, Cairo, Egypt for their opinion. And Sheikh Rashid Rida, Editor of the famous monthly magazine, Al Manar, too, participated in the debate. In this way, it was and still is an international issue.
The quality of the translation is high and its fluency is outstanding too despite the fact that the translators themselves aren’t professional bankers. Their efforts are highly appreciated in communicating this extremely important book of Maulana Maududi in the contemporary lingua franca. As regards the title of the book, it would’ve been better if the title reflected the contents of the book itself like, for instance, ‘A critique of modern banking system and interest’ or something along this line.