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What is Riba or Interest?

May 15, 2022
What is Riba or Interest?

What is Riba or Interest?

Riba means "an addition to" or "excess" over the original price of the good or service. In broader meaning we can say that; the excessive price is paid on any transaction or loan over the original price is called Riba or where the payment of an additional amount on the principal is made conditional to the advance of such a loan is called riba.

The most common form of riba these days is interest, whether that paid on bank accounts or loans. As we know, Interest is strictly Hamram or banned in Islam and any activity in this regard is regarded as sin.

The definition of riba can be clarified and understood further, by looking at its representation within the Quran and Ahadith.

Riba accorfing to Quran

According Surah al-Rum, verse 39

“That which you give as interest to increase the peoples’ wealth increases not with Allah; but that which you give in charity, seeking the goodwill of Allah, multiples manifold.”

According Surah al-Nisa’, verse 161

“And for their taking interest even though it was forbidden for them, and their wrongful appropriation of other peoples’ property. We have prepared a grievous punishment for those among them who reject faith.

According to Surah Aal-Imran, verses 130-2

“O believers, take not doubled and redoubled interest, and fear Allah that you may prosper. Fear the fire which has been prepared for those who reject faith, and obey Allah and the Prophet so that you may receive mercy.”

Riba according Ahadith

From Abu Hurayrah: (Ibn Majah)

The Holly Prophet Muhammad P.B.U.H said: ‘Riba has seventy segments, the least serious being equivalent to a man committing adultery with his own mother.

From Jabir: (Tirmidhi)

The Holly Prophet Muhammad P.B.U.H annoyed the receiver and the payer of interest, the one who records it and the two witnesses to the transaction and said: They are all alike [in guilt].

From Abdallah ibn Hanzalah: (Mishkat al-Masabih)

The Holly Prophet Muhammad P.B.U.H, said: ‘A dirham of riba which a man receives knowingly is worse than committing adultery thirty-six times.’

Types of Riba:

Riba can be classified into 2 main types:

  1. Riba al-Nasiyah: 2- Riba al-Fadl:


Fatwa  about Riba

Fatwa or Islamic Opinion about Riba is little bit different. Islamic scholars have different point of views on it. Some say that Riba is not good in any shape while some scholars say that it is ok. But Riba Money cannot be used in building Masjids or printing of Quran.

Bottom Line:

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