The reasons of Islamic Banking

Islamic Banking is the outcome of Islamic economy. It is the practical application of the Islamic economic norms. As Islamic economy is from the holy Quran, hadith and Sunnah, the origin of islamic Banking is also originated from the same root. So, in order to learn Islamic banking, we must know the Islamic economy. The study related to it is very important.

There are several verses in the holy Quran which reveals the guidelines about transactions in our day to day life. Outside the banking wall we have to do our daily muamalat (transaction). In order to make our financial actions pure we should follow our religious guidelines.

Our whole life is consisted to various types of transaction. Not only in formal banking there are many issues where we should be very careful and knowledgeable. But there are lack of Islamic knowledge.

At first we will mention some of the revelations from the holy Quran. Then we also mention some hadith and Sunnah. We also mention from Ijma and Qyias. From these we will try to clear some issues we always discuss. Our aim is to mention some of the references in order to ensure that from where we are routed and originated.

References from holy Quran on Riba Al Nasiyah  

First, in Surah Ar-Rum, a Makkan Surah wherein the term riba finds mention in the following words:

"And whatever riba you give so that it may increase in the wealth of the people, it does not increase with Allah." [Ar-Rum 30:39]

The second verse is of Surah Al-Nisaa where the term riba is used in the context of sinful acts of the Jews in the following words:

"And because of their charging riba while they were prohibited from it." [An-Nisaa 4:161]

In the third verse of Surah Al-i-'Imran the prohibition of riba is laid down in the following words:

"O those who believe do not eat up riba doubled and redoubled." [Al-i-'Imran 3:130]

The following set of verses is found in the Surah Al-Baqarah in the following words:

"Those who take interest will not stand but as stands whom the demon has driven crazy by his touch. That is because they have said: 'Trading is but like riba'. And Allah has permitted trading and prohibited riba. So, whoever receives an advice from his Lord and stops, he is allowed what has passed, and his matter is up to Allah. And the ones who revert back, those are the people of Fire. There they remain for ever.

Allah destroys riba and nourishes charities. And Allah does not like any sinful disbeliever. Surely those who believe and do good deeds, establish Salah and pay Zakah, have their reward with their Lord, and there is no fear for them, nor shall they grieve.

O those who believe, fear Allah and give up what still remains of the riba if you are believers. But if you do not, then listen to the declaration of war from Allah and His Messenger. And if you repent, yours is your principal. Neither you wrong, nor be wronged. And if there be one in misery, then deferment till ease. And that you leave it as alms is far better for you, if you really know. And be fearful of a day when you shall be returned to Allah, then everybody shall be paid, in full, what he has earned. And they shall not be wronged." [Al-Baqarah 2:275-281]

References from Hadith on Riba Al Fadal

The learned counsel referred to a number of traditions narrated by the exegetes of the Holy Qur'an. For example, he cited the well-known Tafseer of Ibn Jarrir At-Tabari who on the authority of Mujahid has explained the riba of Jahiliyya as follows:

"In the days of Jahiliyya a person used to owe a debt to his creditor then he would say to his creditor, 'I offer you such and such amount and you give me more time to pay.'"

The same explanation has been given by a number of commentators of the Holy Qur'an. Mr. Riazul Hassan Gillani argued that there is no mention in these traditions of any increase on the principal stipulated in the original transaction of loan. What is mentioned here is that the increase used to be offered or claimed at the time of maturity which shows that riba prohibited by the Holy Qur'an was restricted to claiming an amount for giving an additional time to the debtor. If an increased amount is stipulated in the initial transaction of loan, it is not covered by riba al-Qur'an.

 This contention of the learned counsel did not appeal to us at all, for the simple reason that a careful study of the relevant material in the original resources of Tafseer clearly shows that the claim of an increased amount over the principal had different forms in the days of Jahiliyya. Firstly, while advancing a loan the creditor used to claim an increased amount over the principal and would advance loan on this clearly stipulated condition as is mentioned by Imam Al-Jassas in his Ahkamul Qur'an already quoted above. Secondly, the creditor used to charge a monthly return from the debtor while the principal amount would remain intact up to the day of maturity as mentioned by Imam Ar-Raazi and Ibn Aadil already quoted.

The third form is mentioned by Mujahid as quoted by the learned counsel, but the full explanation of this transaction is given by Ibn Jarir himself on the authority of Qatadah in the following words:

"The Riba of Jahiliyya was a transaction whereby a person used to sell a commodity for a price payable at a future specific date, thereafter when the date of payment came and the buyer was not able to pay, the seller used to increase the amount due and give him more time."

48. The same explanation has been given by al-Suyuti on the authority of Faryabi in the following words:

"They used to purchase a commodity on the basis of deferred payment, then on the date of maturity the sellers used to increase the due amount and increase the time of payment."

The following Ahadith are sufficient to prove this point:

(We have already mentioned that the Holy Prophet, Sall-Allahu alayhi wa sallam, made a general declaration of the prohibition of riba at the time of his last sermon on the occasion of his last Hajj. The words used by him in that sermon, as reported by Ibn Abi Hatim, were as follows:

"Listen, every amount of interest that was due in Jahiliyya is now declared void for you in its entirety. You are entitled only to your principal whereby neither you wrong nor be wronged. And the first liability of interest declared to be void is the interest of Abbas ibn Abd-ul-Muttalib which is hereby declared void in its entirety."

Here the Holy Prophet, Sall-Allahu alayhi wa sallam, declared the total amount exceeding the principal as nullified in its entirety. He has left no ambiguity in the fact that the creditors will be entitled to get back only the principal and will not be able to charge even a penny over and above the principal amount.

(ii) It is reported by Hammad b, Salamah in his Jame from Sayyidna Abu Hurairah, Radi-Allahu anhu, that the Holy Prophet, Sall-Allahu alayhi wa sallam, has said:

"If the creditor received a goat as mortgage from the debtor, the creditor may use its milk to the extent he has spent in providing fodder to the goat. However, if the milk is more than the price of the fodder, the excess is riba."

(iii) Imam Maalik has reported the following ruling of Abdullah Ibn Umar, Radi-Allahu anhu:

"Whoever advances a loan must not stipulate except that the principal loan shall be repayable."

(iv) Imam Maalik has also narrated in the same chapter that Abdullah Ibn Masood, Radi-Allahu anhu, used to say.

"Whoever advances a loan cannot stipulate in the agreement that he will receive something better than he has advanced. Even if it be a handful of fodder, it is riba."

(v) It is reported by Imam Al-Baihaqi that a person said to Abdullah Ibn Masood, Radi-Allahu anhu:

"I have taken a loan of 500 from a person on a condition that I shall lend him my horse for riding.

Abdullah Ibn Masood, Radi-Allahu anhu, answered:

"Whatever benefit of riding your creditor will receive, it will be riba."

(vi) The same author has reported that Sayyidna Anas Ibn Maalik, Radi-Allahu anhu, was asked about a person who advances a loan to someone and then the debtor gives him something as a gift, will it be permissible for him to accept that gift? Sayyidna Anas Ibn Maalik, Radi-Allahu anhu answered that the Holy Prophet, Sall-Allahu alayhi wa sallam, has said:

"If one of you has advanced a loan and the debtor offer the creditor a bowl (of food), he should not accept it, or if the debtor offers him a ride of his animal (cattle) the debtor must not take the ride unless this type of gift has been a usual practice between them before advancing the loan".

The substance of the hadith is that if the debtor and creditor were on friendly terms with each other and it was their habit that one of them used to give a gift to the other, then this type of gift can be acceptable even after the recipient has advanced a loan to the giver. However, if there were no such terms between the creditor and the debtor before the loan transaction, then the debtor should not accept it, because it will have smell of riba.

(vii) The same author, Al-Baihaqi, has reported from Abdullah Ibn Abbas, Radi-Allahu anhu, who was asked about a person who owed 20 Dirhams to another person, and started offering his creditor some gifts. Whenever the creditor received a gift, he sold it in the market until the aggregate amount received by the creditor reached 13 dirhams. Abdullah Ibn Abbas, Radi-Allahu anhu, advised the creditor not to take more than 7 dirhams.

(viii) It is reported by Sayyidna Ali, Radi-Allahu anhu, that the Holy Prophet, Sall-Allahu alayhi wa sallam, has said,

"Every loan that derives a benefit (to the creditor) is riba."

This hadith is reported by Harith ibn Abi Usamah in his Musnad.

References from Bible

This prohibition is still available in the Old Testament of the Bible. The following excerpts may be quoted with advantage:

"Thou shalt not lend upon usury to thy brother; usury of money, usury of victuals, usury of anything that is lent upon usury." [Deuteronomy 23:19]

"Lord, who shall abide in thy tabernacle? Who shall dwell in thy holy hill? He that walketh uprightly, and worketh righteousness and speaketh the truth in his heart. He that putteth not out of his money to usury, nor taketh reward against the innocent." [Psalms 15:1, 2, 5]

"He that by usury and unjust gain increaseth his substance, he shall gather it for him that will pity the poor." [Proverbs 28:8]

"Then I consulted with myself, and I rebuked the nobles, and rules and said unto them, Ye exact usury, every one of his brother. And I set a great assembly against them." [Nehemiah 5:7]

"He that hath not given forth upon usury, neither hath taken any increase, that hath withdrawn his hand from iniguity, hath executed true judgment between man and man, hath walked in my statues, and hath kept my judgments, to deal truly; he is just. He shall surely live, said the Lord God." [Ezekiel 18:8.9]

"In thee have they taken gifts to shed blood; thou hast taken usury and increase, and though hast greedily gained of thy neighbors by extortion, and hast forgotten me, said the Lord God." [Ezekiel 22:12]

The First Council of Nicaea, in 325, forbade clergy from engaging in usury (canon 17). At the time, usury was interest of any kind, and the canon forbade the clergy to lend money at interest rates even as low as 1 percent per year. Later ecumenical councils applied this regulation to the laity.

Lateran III decreed that persons who accepted interest on loans could receive neither the sacraments nor Christian burial. Pope Clement V made the belief in the right to usury a heresy in 1311, and abolished all secular legislation which allowed it. Pope Sixtus V condemned the practice of charging interest as "detestable to God and man, damned by the sacred canons and contrary to Christian charity."

Theological historian John Noonan argues that "the doctrine [of usury] was enunciated by popes, expressed by three ecumenical councils, proclaimed by bishops, and taught unanimously by theologians."

Certain negative historical renditions of usury carry with them social connotations of perceived "unjust" or "discriminatory" lending practices. The historian Paul Johnson, comments:

Most early religious systems in the ancient Near East, and the secular codes arising from them, did not forbid usury. These societies regarded inanimate matter as alive, like plants, animals and people, and capable of reproducing itself. Hence if you lent 'food money', or monetary tokens of any kind, it was legitimate to charge interest. Food money in the shape of olives, dates, seeds or animals was lent out as early as c. 5000 BC, if not earlier. ...Among the Mesopotamians, Hittites, Phoenicians and Egyptians, interest was legal and often fixed by the state. But the Hebrew took a different view of the matter.

The Hebrew Bible regulates interest taking. Interest can be charged to strangers but not between Hebrews.

Deuteronomy 23:19 Thou shalt not lend upon interest to thy brother: interest of money, interest of victuals, interest of any thing that is lent upon interest.

Deuteronomy 23:20 Unto a foreigner thou mayest lend upon interest; but unto thy brother thou shalt not lend upon interest; that the LORD thy God may bless thee in all that thou puttest thy hand unto, in the land whither thou goest in to possess it.

Israelites were forbidden to charge interest on loans made to other Israelites, but allowed to charge interest on transactions with non-Israelites, as the latter were often amongst the Israelites for the purpose of business anyway; but in general, it was seen as advantageous to avoid getting into debt at all, to avoid being bound to someone else. Debt was to be avoided and not used to finance consumption, but only taken on when in need. However, the laws against usury were among many laws which the prophets condemn the people for breaking.

Johnson contends that the Torah treats lending as philanthropy in a poor community whose aim was collective survival, but which is not obliged to be charitable towards outsiders.

A great deal of Jewish legal scholarship in the Dark and the Middle Ages was devoted to making business dealings fair, honest and efficient.

Usury (in the original sense of any interest) was at times denounced by a number of religious leaders and philosophers in the ancient world, including Moses, Plato, Aristotle, Cato, Cicero, Seneca,  Aquinas, Muhammad, Jesus, Philo and Gautama Buddha. For example, Cato said:

"And what do you think of usury?"—"What do you think of murder?"

Interest of any kind is forbidden in Islam. As such, specialized codes of banking have developed to cater to investors wishing to obey Qur'anic law. (See Islamic banking)

As the Jews were ostracized from most professions by local rulers, the Western churches and the guilds, they were pushed into marginal occupations considered socially inferior, such as tax and rent collecting and moneylending. Natural tensions between creditors and debtors were added to social, political, religious, and economic strains.

...financial oppression of Jews tended to occur in areas where they were most disliked, and if Jews reacted by concentrating on moneylending to non-Jews, the unpopularity—and so, of course, the pressure—would increase. Thus the Jews became an element in a vicious circle. The Christians, on the basis of the Biblical rulings, condemned interest-taking absolutely, and from 1179 those who practiced it were excommunicated. Catholic autocrats frequently imposed the harshest financial burdens on the Jews. The Jews reacted by engaging in the one business where Christian laws actually discriminated in their favor, and became identified with the hated trade of moneylending.

In England, the departing Crusaders were joined by crowds of debtors in the massacres of Jews at London and York in 1189–1190. In 1275, Edward I of England passed the Statute of the Jewry which made usury illegal and linked it to blasphemy, in order to seize the assets of the violators. Scores of English Jews were arrested, 300 were hanged and their property went to the Crown. In 1290, all Jews were expelled from England, and allowed to take only what they could carry; the rest of their property became the Crown's. Usury was cited as the official reason for the Edict of Expulsion. However, not all Jews were expelled: it was easy to convert to Christianity and thereby avoid expulsion. Many other crowned heads of Europe expelled the Jews, although again converts to Christianity were no longer considered Jewish (see the articles on marranos or crypto-Judaism).

The growth of the Lombard bankers and pawnbrokers, who moved from city to city, was along the pilgrim routes.

Die Wucherfrage is the title of a Lutheran Church–Missouri Synod work against usury from 1869. Usury is condemned in 19th-century Missouri Synod doctrinal statements.

In the 16th century, short-term interest rates dropped dramatically (from around 20–30% p.a. to around 9–10% p.a.). This was caused by refined commercial techniques, increased capital availability, the Reformation, and other reasons. The lower rates weakened religious scruples about lending at interest, although the debate did not cease altogether.

The papal prohibition on usury meant that it was a sin to charge interest on a money loan. As set forth by Thomas Aquinas, the natural essence of money was as a measure of value or intermediary in exchange. The increase of money through usury violated this essence and according to the same Thomistic analysis, a just transaction was one characterized by an equality of exchange, one where each side received exactly his due. Interest on a loan, in excess of the principal, would violate the balance of an exchange between debtor and creditor and was therefore unjust.

Religious context

Judaism

Jews are forbidden to use usury in dealing with fellow Jews; however, they are permitted to charge interest on loans to non-Jews. This is outlined in the Jewish scriptures known as the Torah and other books of the Tanakh, also held by Christians to be scripture as part of the Old Testament. From the Jewish Publication Society's 1917 Tanakh, with Christian verse numbers, where different, in parentheses:

Exodus 22:24 (25)—If thou lend money to any of My people, even to the poor with thee, thou shalt not be to him as a creditor; neither shall ye lay upon him interest.

Leviticus 25:36— Take thou no interest of him or increase; but fear thy God; that thy brother may live with thee.

Leviticus 25:37— Thou shalt not give him thy money upon interest, nor give him thy victuals for increase.

Deuteronomy 23:20 (19)—Thou shalt not lend upon interest to thy brother: interest of money, interest of victuals, interest of any thing that is lent upon interest.

Deuteronomy 23:21 (20)—Unto a foreigner thou mayest lend upon interest; but unto thy brother thou shalt not lend upon interest; that the LORD thy God may bless thee in all that thou puttest thy hand unto, in the land whither thou goest in to possess it.

Ezekiel 18:17—that hath withdrawn his hand from the poor, that hath not received interest nor increase, hath executed Mine ordinances, hath walked in My statutes; he shall not die for the iniquity of his father, he shall surely live.

Psalm 15:5—He that putteth not out his money on interest, nor taketh a bribe against the innocent. He that doeth these things shall never be moved.

Christianity

Christ drives the Usurers out of the Temple, a woodcut by Lucas Cranach the Elder in Passionary of Christ and Antichrist.

The New Testament contains references to usury, notably in the Parable of the talents:

"Well then, you should have put my money on deposit with the bankers, so that when I returned I would have received it back with interest.."

— Matthew 25:27

"…Out of thine own mouth will I judge thee, thou wicked servant. Thou knewest that I was an austere man, taking up that I laid not down, and reaping that I did not sow. Wherefore then gavest not thou my money into the bank, that at my coming I might have required mine own with usury?"

— Luke 19:22-23

The following scriptures teach about lending:

"Give to the one who asks you, and do not turn away from the one who wants to borrow from you."

— Matthew 5:42

"And if you lend to those from whom you expect repayment, what credit is that to you? Even sinners lend to sinners, expecting to be repaid in full. But love your enemies, do good to them, and lend to them without expecting to get anything back. Then your reward will be great, and you will be children of the Most High, because he is kind to the ungrateful and wicked."

— Luke 6:34-35

"Give, and it will be given to you. A good measure, pressed down, shaken together and running over, will be poured into your lap. For with the measure you use, it will be measured to you."

— Luke 6:38

Islam

The following quotations are English translations from the Qur'an:

Those who charge usury are in the same position as those controlled by the devil's influence. This is because they claim that usury is the same as commerce. However, God permits commerce, and prohibits usury. Thus, whoever heeds this commandment from his Lord, and refrains from usury, he may keep his past earnings, and his judgment rests with God. As for those who persist in usury, they incur Hell, wherein they abide forever (Al-Baqarah 2:275)

God condemns usury, and blesses charities. God dislikes every disbeliever, guilty. Those who believe and do good works and establish worship and pay the poor-due, their reward is with their Lord and there shall no fear come upon them neither shall they grieve. O you who believe, you shall observe God and refrain from all kinds of usury, if you are believers. If you do not, then expect a war from God and His messenger. But if you repent, you may keep your capitals, without inflicting injustice, or incurring injustice. If the debtor is unable to pay, wait for a better time. If you give up the loan as a charity, it would be better for you, if you only knew. (Al-Baqarah 2:276-280)

O you who believe, you shall not take usury, compounded over and over. Observe God, that you may succeed. (Al-'Imran 3:130)

And for practicing usury, which was forbidden, and for consuming the people's money illicitly. We have prepared for the disbelievers among them painful retribution. (Al-Nisa 4:161)

The usury that is practiced to increase some people's wealth, does not gain anything at God. But if people give to charity, seeking God's pleasure, these are the ones who receive their reward many fold. (Ar-Rum 30:39)

The attitude of Muhammad to usury is articulated in his Last Sermon

O People, just as you regard this month, this day, this city as Sacred, so regard the life and property of every Muslim as a sacred trust. Return the goods entrusted to you to their rightful owners. Hurt no one so that no one may hurt you. Remember that you will indeed meet your LORD, and that HE will indeed reckon your deeds. ALLAH has forbidden you to take usury (interest), therefore all interest obligation shall henceforth be waived. Your capital, however, is yours to keep. You will neither inflict nor suffer any inequity. Allah has Judged that there shall be no interest and that all the interest due to Abbas ibn 'Abd'al Muttalib (Prophet's uncle) shall henceforth be waived...

Scholastic theology

The first of the scholastic Christian theologians, Saint Anselm of Canterbury, led the shift in thought that labeled charging interest the same as theft. Previously usury had been seen as a lack of charity.

St. Thomas Aquinas, the leading scholastic theologian of the Roman Catholic Church, argued charging of interest is wrong because it amounts to "double charging", charging for both the thing and the use of the thing. Aquinas said this would be morally wrong in the same way as if one sold a bottle of wine, charged for the bottle of wine, and then charged for the person using the wine to actually drink it. Similarly, one cannot charge for a piece of cake and for the eating of the piece of cake. Yet this, said Aquinas, is what usury does. Money is a medium of exchange, and is used up when it is spent. To charge for the money and for its use (by spending) is therefore to charge for the money twice. It is also to sell time since the usurer charges, in effect, for the time that the money is in the hands of the borrower. Time, however, is not a commodity that anyone can charge. In condemning usury Aquinas was much influenced by the recently rediscovered philosophical writings of Aristotle and his desire to assimilate Greek philosophy with Christian theology. Aquinas argued that in the case of usury, as in other aspects of Christian revelation, Christian doctrine is reinforced by Aristotelian natural law rationalism. Aristotle's argument is that interest is unnatural, since money, as a sterile element, cannot naturally reproduce itself. Thus, usury conflicts with natural law just as it offends Christian revelation: see Thought of Thomas Aquinas.

Though time cannot be sold, the difficulty of quantifying effort and the opportunity cost of performing labor leads laborers to be typically compensated by the hour, day, week, or month. (As an example of labor without the expenditure of energy, a security guard's primary responsibility may simply be to be present; time spent at the job cannot be spent providing for his own survival, so he must be compensated for the opportunity cost. He is paid (compensated) for his time, not necessarily for his effort).

Outlawing usury did not prevent investment, but stipulated that in order for the investor to share in the profit he must share the risk. In short he must be a joint-venturer. Simply to invest the money and expect it to be returned regardless of the success of the venture was to make money simply by having money and not by taking any risk or by doing any work or by any effort or sacrifice at all, which is usury. St Thomas quotes Aristotle as saying that "to live by usury is exceedingly unnatural". Islam likewise condemns usury but allowed commerce (Al-Baqarah 2:275) - an alternative that suggests investment and sharing of profit and loss instead of sharing only profit through interests. Judaism condemns usury towards Jews, but allows it towards non-Jews. (Deut 23:19-20) St Thomas allows, however, charges for actual services provided. Thus a banker or credit-lender could charge for such actual work or effort as he did carry out e.g. any fair administrative charges. The Catholic Church, in a decree of the Fifth Council of the Lateran, expressly allowed such charges in respect of credit-unions run for the benefit of the poor known as "montes pietatis".

In the 13th century Cardinal Hostiensis enumerated thirteen situations in which charging interest was not immoral. The most important of these was lucrum cessans (profits given up) which allowed for the lender to charge interest "to compensate him for profit foregone in investing the money himself." (Rothbard 1995, p. 46) This idea is very similar to Opportunity Cost. Many scholastic thinkers who argued for a ban on interest charges also argued for the legitimacy of lucrum cessans profits (e.g. Pierre Jean Olivi and St. Bernardino of Siena). However, Hostiensis' exceptions, including for lucrum cessans, were never accepted

as official by the Roman Catholic Church.

The Roman Catholic Church has always condemned usury, but in modern times, with the rise of capitalism and the disestablishment of the Catholic Church in majority Catholic countries, this prohibition on usury has not been enforced.

Pope Benedict XIV's encyclical Vix Pervenit gives the reasons why usury is sinful:

The nature of the sin called usury has its proper place and origin in a loan contract… [which] demands, by its very nature, that one return to another only as much as he has received. The sin rests on the fact that sometimes the creditor desires more than he has given…, but any gain which exceeds the amount he gave is illicit and usurious.

One cannot condone the sin of usury by arguing that the gain is not great or excessive, but rather moderate or small; neither can it be condoned by arguing that the borrower is rich; nor even by arguing that the money borrowed is not left idle, but is spent usefully…

Other contexts

Usury in literature

 

In The Divine Comedy Dante places the usurers in the inner ring of the seventh circle of hell.

By the 18th century, usury was more often treated as a metaphor than a crime in itself, so Jeremy Bentham's Defense of Usury was not as shocking as it would have appeared two centuries earlier.

In Honoré de Balzac's 1830 novel Gobseck, the title character, who is a usurer, is described as both "petty and great—a miser and a philosopher..." The character Daniel Quilp in The Old Curiosity Shop by Charles Dickens is a usurer.

In the early 20th century Ezra Pound's anti-usury poetry was not primarily based on the moral injustice of interest[dubious – discuss] but on the fact that excess capital was no longer devoted to artistic patronage, as it could now be used for capitalist business investment.

Usury and royalties

Royalties are contractual obligations of the Issuer of the royalty, made for the benefit of the holder of the royalty. Royalties require the payment of an agreed percentage of revenue of the Issuer, for an agreed period of time. In the event a royalty is purchased from an Issuer, the future revenue upon which the royalty is based is unknown at the time of the original transaction. Therefore, the cumulative amount of the future royalty payments is also an unknown. Royalty payments are not interest and royalties expire without value at their maturity. To be usurious payments made and received for the use of funds must be considered interest for loaned funds which require repayment at the maturity of the loan. The value in gains by the use of the royalty should equal its payment value, excess cost or interest beyond its tangible value is illicit interest or usury.