A revisit to the prohibition of interest-bearing loans, impact of the verses’ clarity and religious authorities’ interventions: a comparison between the three Abrahamic religions

Purpose This research aims to examine how the clarity of interest-condemning verses in religious texts, coupled with the influence of religious authorities, has shaped the discourse on prohibiting interest-bearing loans across Judaism, Christianity and Islam. Design/methodology/approach This research is conceptual in nature, employing historical analysis to explore the evolution of interest-bearing loans prohibitions across the three Abrahamic religions. Furthermore, the article conducts a comparative analysis that explores religious interpretations within Jewish, Christian and Islamic jurisprudential literature seeking to mitigate usury restrictions. To fulfill the research objective, the article investigates the underpinning foundation of usury prohibitions in the three Abrahamic religions. This investigation involves a thorough analysis of the ban on usury, as documented in the primary religious texts of each religion: the Torah and Talmud for Judaism, the Old and New Testaments for Christianity and the Qur’an and Sunnah for Islam. Additionally, the study explores various interpretations of these scriptures, considering perspectives from both official religious institutions and individual informal theologians. Findings Through an examination of the verses condemning usury in the sacred texts of the three religions, as well as the historical interpretations of interest prohibition passages and the intervention of religious authorities, the author argues that both variables might have contributed inconsistently to the discourse on usury prohibition; nonetheless, they mostly ended with prohibition regression. Research limitations/implications The research is confined to the primary legislation sources of the Abrahamic religions: Torah and Talmud in Judaism, Old and New Testaments in Christianity, and Qur’an and Sunnah in Islam, investigating how theologians’ interpretations evolved in response to public pressure to relax the ban on usury. This research expands the finance literature by exploring two crucial variables that might have potentially influenced the theoretical underpinnings of religiously oriented finance and banking systems. By examining the impact of the verses’ clarity and religious authorities’ interventions, the study sheds light on how these factors may have shaped the fundamental principles of religious-based finance within the three Abrahamic religions, particularly when addressing interest-bearing loans. Practical implications The findings of this research may provide valuable insights for practitioners of religious-based finance and banking systems, with particular relevance to Islamic finance, which stands as the most surviving religious-based banking system to date. These insights could contribute to the effective implementation of practices that truly reflect authentic religious principles within financial institutions that claim religious roots within their operations. Originality/value This research advances the development of a comprehensive theory of religious finance, with a particular focus on Islamic finance. It also investigates the historical background that has led to problematic finance practices in most contemporary Islamic financial institutions.