What is riba? A simple definition and the reasons for the prohibition
AmanaFi team · Updated · 1 min read
Riba, often translated as usury or interest, means a surplus demanded in exchange for a loan or a delay, or an unequal exchange of certain goods. It is forbidden in the Quran, notably in Surah Al-Baqarah, verse 275.
The two main forms
Jurists classically distinguish two types.
- Riba an-nasi'a: the surplus added to a debt in return for a delay, that is, interest on a loan.
- Riba al-fadl: the unequal exchange, at the same moment, of goods of the same kind, such as gold for gold with an excess.
Why the prohibition
A loan of money is conceived as an act of solidarity, not as a source of profit from someone else's difficulty. The reasons given are fairness between the parties, sharing of risk and a fight against debt that grows on its own.
What is permitted instead
Islam encourages trade, leasing, partnership with sharing of profits and losses, and the interest-free loan (qard hassan). Participatory banks rely on these contracts. Details of a specific case should be confirmed with a qualified person.
Frequently asked
Are all bank fees riba?
No. Fees matching a real, clearly defined service are not interest; a surplus proportional to the amount and duration of a loan is. Borderline cases are confirmed with a compliance board.
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