Fairness and Usury

Meddlesome Muse

Usury is the practice of charging high interest on a loan. Say if I lend my friend 100 bucks, I demand him to return 120 bucks. Although he is repaying the 100 bucks, he gives an extra 20. That 20 is interest. In the end, the money lender gets more than he gave. And the borrower returns more money than taken. And this is how the modern economy works. To understand fairness and usury, we must also understand how the contemporary bank system works.

In a nutshell.

• Person A wants to deposit money into a bank.
• Person A approaches the bank and deposits 100 bucks.
• The bank promises to keep the 100 bucks safe.
• However, the bank keeps 50 bucks and lends the other 50.
• Person B takes a 50-buck loan from the bank, this is where the money of person A goes.
• When person B has to return the loan, interest is charged and the person returns 70-bucks.
• The extra 20 bucks now earned is shared by the bank and person A.
• The bank earns a cut, and person A gets interest for the deposit.

Interest is the backbone of banks. Without interest, banks would be hardly earning any profit. But that is not the point. Usury, as a whole, is a forbidden concept in many religions. Religion, being a social institution, greatly affects how usury is viewed in Kashmir. Most of the general population believe it is wrong. Yet they don’t know the reason. Usury is and should be incorrect.

Fairness is a common term. Although I don’t refer to white skin! Fairness is a generally understood term. Fairness implies all decisions are taken with unbiased intentions. Simply, fairness is having no discrimination in treatment and verdict. In banking terms, we can say fairness is when two involved parties have the same chances of success. If me and my friend start a business, then we must share the profit and bear the losses together. All have equal opportunities and conditions. If conditions favour no one party, then the economy is fair. But usury is against that principle.

Usury leads to an unfair system, where the lender has an advantage. The lender gets more than borrowed and the borrower returns more. The lender is on a higher ground. If the borrower fails to pay back, the lender can foreclose any mortgage. In formal lending, a mortgage is the key to unfairness. In informal lending, taking over the borrower's lands and assets is quite common. It is due to the belief that a lender is superior. And the lender always has a higher chance of success in the trade. But the borrower is always under scrutiny. The principle of fairness is broken here. Usury is unfair because it leads to the lender having a higher probability of return.

Usury is the opposite of charity. This sentiment is mentioned in the Holy Quran as well. Usury is the process of lending money, and so is charity. But charity does not demand anything back from the borrower. Usury is demanding on the borrower. Usury is, hence, greedy. In essence, usury wants more at any cost. Charity does not specifically want anything material in return. Usually, it is done for spiritual satisfaction. Lending money should be done for compassion and care. Not for rewards.

Usury is also not deserved by the lender. The lender does not deserve to get any extra money back. All the lender does is give money. The usage of the money is up to the borrower. Normally, loans are taken in times of need. When the borrower takes up a loan and spends a good part of their income, and life, trying to repay the loan. The burden is always on the borrower’s end. The lender has done nothing special to deserve the extra money. In real life, giving away money is not truly great, it is the intention. The willingness to let go of money for social good is a noble act. The intention to give money in hopes of extorting more back is evil. That is evident by the plight of those crushed under loans. It may fill the pockets of the banks but also robs the common man of a stable income and mental health.

Going against usury leads to a noble life. A life that focuses more on giving and being generous. A life that is unafraid to lose material wealth, because it only matters to a certain extent. It leads to a life of charity and giving. It leads to a life that is human.

(The author is a student of  Humanities at DPS Srinagar)