International Islamic Economics Conference at UIN Bukittinggi: Pakistani Scholar Shahid Sultan Unpacks Riba
BUKITTINGGI, INDONESIA — Modern banking practices and conventional finance came under sharp criticism at the 7th International Conference of Islamic Economics and Financial Studies (ICIEFS) held at Faculty of Islamic Economics and Business, Universitas Islam Negeri ( State Islamic University) of Sjech Muhammad Djamil Djambek Bukittinggi on Wednesday (Oct 7, 2026).
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| Dr. Shahid Sultan |
Dr. Shahid Sultan, a researcher from the School for Economic Revival, Islamabad Pakistan, strongly criticized the fundamental confusion between trading profits and usurious practices (riba) that are increasingly disguised within modern financial systems. In his presentation, Sultan argued that Western finance has missteered for centuries by deliberately conflating commercial exchange (bay') with usury simply to pursue financial gain.
"Western finance has been groping in the dark for thousands of years! They cannot distinguish price (thaman) from market value, to the point that delivery delays are used as a pretext to extract an excess," Sultan told the assembly of Islamic economics scholars and practitioners.
Sultan outlined how the unlawful usurpation of wealth (usurpation) in markets has evolved through four main historical phases. Beginning with open usurpation via physical looting and banditry, these criminal tactics shifted to commodity markets through deficit crimes—such as short-weighing and manipulating measures (Qur'an 83:1–3, 11:84–85). The methods later evolved into excess crimes using deceptive tactics like fake bidding and late payment penalties, ultimately culminating in commercial moneylending that abandons real-sector trade to deal exclusively in money while shifting away market risk.
Citing the Hanafi school of jurisprudence as formulated by Imam Al-Sarakhsī, Sultan explained that riba is defined as an excess (faḍl) without a lawful counter-value, stipulated in a reciprocal exchange (bay'). Such excess can be physical, non-physical, or tied to time delays.
He emphasized that unlike deficit crimes, which have a natural lower limit bound at zero, usurious excess has no upper limit (excess has no ceiling). Consequently, the Qur'an strictly prohibits compound usury (Qur'an 3:130). However, Mr Sultan noted that voluntary gestures (iḥsān)—such as an unasked discount from a seller or a borrower returning a benevolent loan (qarḍ) with extra value out of goodwill—do not constitute riba (Sahih Muslim).
Two Broken Boundaries and the Trap of Riba al-Nasa'
Sultan’s critique grew sharper as he dissected modern bank credit creation. He highlighted two natural economic boundaries in modern banking that have broken down, unleashing unchecked wealth extraction from the real economy:
(1) The Broken Limit on Real Money Supply: Historically, moneylenders could only lend the physical gold and silver they actually held. Today, bankers defer the payment of physical dinars and replace them with credit liabilities (checkable balances), effectively creating new money and deposits out of thin air with every loan issued.
(2) The Broken Limit on Counterparties:Previously, the burden of usury was borne solely by the direct borrower. Now, the extraction of value has shifted to the general public, who are forced to accept bank credit as currency and indirectly absorb interest costs.
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| How Modern Banking Breaks Money:An infographic detailing how fractional credit and widespread public exposure cross the line into prohibited ribā al-nasa’ (Dr. Shahid Sultan's Presentation). |
Citing the classical scholar Imam Al-Kasani, Mr Sultan stressed that justice and equivalence are mandatory prerequisites in Islamic trade. He urged financial industry players to repent and return to Qur'anic precepts (Qur'an 2:275 & 2:279).
"Claiming that trade is just like usury is an old excuse that has been explicitly refuted by the Qur'an! Halal transactions must be equal and fair, not built on unilaterally increasing the burden on others," he concluded. (IRWANDI)
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