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Al-Baqarah 2: 279–81


(279) But if you fail to do so, then be warned of war from Allah and His Messenger.100 If you repent even now, you have the right of the return of your capital; neither will you do wrong nor will you be wronged. (280) But if the debtor is in straitened circumstance, let him have respite until the time of ease; and whatever you remit by way of charity is better for you, if only you know.101 (281) And have fear of the Day when you shall return to Allah, and every human being shall be fully repaid for whatever (good or evil) he has done, and none shall be wronged.

100 This verse was revealed after the conquest of Makkah and has been placed here because of its contextual relevance. Although interest was considered objectionable even before, it had not been legally prohibited. After the revelation of this verse interest-bearing transactions became a punishable offence within the realm of Islam. On the basis of the last words of the verse, Ibn [Abbas, Hasan al-Basri, Ibn Sirin and Rabi[ ibn Anas are of the view that pressure should be brought against anyone who charges interest within the boundaries of the Islamic State (Dar al-Islam) to repudiate the transaction and recant; and if he persists, he should be put to death. Others consider it sufficient to imprison such people and keep them in prison until they pledge to give up charging interest.

101 This verse is the basis of the Islamic regulation that if a person is incapable of paying off his debt, the court will force the creditors to grant him respite from payment. In fact, under certain circumstances, the court is entitled to remit a part of his debt and, in some cases, the whole of it. Muslim jurists have made it clear that a debtor’s residential house, eating utensils, clothes and the tools which he uses for earning his livelihood may not be confiscated in any circumstance whatsoever for non-payment of loans.

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