Abrahamic Religions Perspective on Usury: A Comparative Analysis of Religious Ethics and Modern Banking Practices

Abstract

This paper provides a comprehensive comparative analysis of the theological and ethical doctrines surrounding usury within the three Abrahamic traditions: Judaism, Christianity, and Islam. The primary objective of this study is to investigate how these ancient scriptural prohibitions navigate the functional demands of modern commercial finance and to identify the persistent tensions between moral economies and market-driven capital requirements. The methodology employs a four-part analytical framework. It begins with a critical review of foundational sacred texts—specifically the Torah, the New Testament, and the Qur'an—to establish the scriptural bedrock of the prohibition. This is followed by a historical analysis of the strategies used by adherents to interpret and circumvent these laws over centuries. Finally, the study applies these historical insights to contemporary case studies, including the UK payday lending crisis and the evolution of the global Islamic banking and finance (IBF) industry. The results indicate that while each faith maintains a foundational condemnation of exploitative lending, they have all developed remarkably similar methods of reinterpretation and contractual innovation. These include narrowing the legal definition of usury, creating exemptions for out-group lending, and utilizing "legal fictions"—such as the Heter Iska in Judaism, the contractum trinius in Medieval Christianity, and Murabahah in modern Islamic finance—to replicate the economic outcomes of interest-bearing loans while maintaining formal religious compliance.The study concludes that the debate over usury is a rich intellectual heritage with direct relevance to 21st-century economic justice. Paradoxically, the Islamic tradition, which holds the most absolute prohibition against riba, has established the most formalized system of circumvention through the global Islamic banking sector. Ultimately, the conflict between protecting the vulnerable and the systemic requirements of capital remains an unresolved and defining challenge for human society, offering a framework for designing more ethical global financial systems.