{"id":7008,"date":"2022-05-31T19:54:56","date_gmt":"2022-05-31T19:54:56","guid":{"rendered":"https:\/\/ifg.local\/articles\/what-is-riba-interest-in-islam-islamic-finance-definitions-series\/"},"modified":"2023-09-21T10:04:07","modified_gmt":"2023-09-21T10:04:07","slug":"what-is-riba-interest-in-islam-islamic-finance-definitions-series","status":"publish","type":"post","link":"https:\/\/www.islamicfinanceguru.com\/articles\/what-is-riba-interest-in-islam-islamic-finance-definitions-series","title":{"rendered":"What is Riba (interest) in Islam? | Islamic Finance Definitions Series"},"content":{"rendered":"<div data-hs-responsive-table=\"true\" style=\"overflow-x: auto; max-width: 100%; width: 100%; margin-left: auto; margin-right: auto;\">\n<table style=\"width: 100%; border: 1px solid #99acc2; border-collapse: collapse; table-layout: fixed; border-style: dotted; border-color: #000000;\">\n<tbody>\n<tr>\n<td style=\"width: 100%; padding: 4px;\">\n<p><a href=\"#WhatdoesIslamsayaboutriba\" rel=\"noopener\"><span style=\"color: #305cff;\">- What does Islam say about <em>riba<\/em>?<\/span><\/a><\/p>\n<p><a href=\"#Whyisribaforbidden\" rel=\"noopener\"><span style=\"color: #305cff;\">- Why is <em>riba<\/em> forbidden?&nbsp;<\/span><\/a><\/p>\n<p><a href=\"#Ribaandthemodernday\" rel=\"noopener\"><span style=\"color: #305cff;\">- <em>Riba<\/em> and the modern day<\/span><\/a><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<p>&nbsp;<\/p>\n<p><i>Riba <\/i>is an Arabic word meaning \u2018to increase\u2019 or \u2018to exceed\u2019.<\/p>\n<p><!--more--><\/p>\n<p><i>Riba<\/i> is commonly translated to \u2018interest\u2019 or \u2018usury\u2019 in English and is a charge for the use of another\u2019s money. It also includes unequal exchanges.<\/p>\n<p>An example of this would be taking a loan from someone who expects it to be repaid in addition to 5% per month on anything that has not been paid at the end of each month.<\/p>\n<p>So for example you lend \u00a3100 for one month. At the end of that you would repay \u00a3105.<\/p>\n<p><a id=\"WhatdoesIslamsayaboutriba\" data-hs-anchor=\"true\"><\/a><\/p>\n<h2>What does Islam say about <i>riba<\/i>?<\/h2>\n<p>The last verse of the Quran to be revealed was the verse on <i>riba <\/i><em>[Bukhari]<\/em><i>. <\/i>The Quran and the Prophet (peace be upon him) were very clearly against <i>riba<\/i>:<\/p>\n<ul>\n<li>\u201c\u2026 Allah has allowed trade and has forbidden <i>riba<\/i>\u2026\u201d [2:275]<\/li>\n<li>\u201cYou who believe, beware of God: give up any outstanding dues from <i>riba<\/i>, if you are true believers. If you do not, then be warned of war from God and His Messenger.\u201d [2:278-279]<\/li>\n<li>\u201cYou who believe, do not consume <i>riba<\/i>, doubled and redoubled. Be mindful of God so that you may prosper.\u201d&nbsp; [3:130]<\/li>\n<li>\u201cWhatever you lend out in usury to gain value through other people\u2019s wealth will not increase in God\u2019s eyes, but whatever you give in charity, in your desire for God\u2019s approval, will earn multiple rewards.\u201d [30:39]<\/li>\n<li>The Prophet (peace be upon him) cursed the one who took or gave <i>riba [Bukhari].<\/i><\/li>\n<\/ul>\n<p><a id=\"Whyisribaforbidden\" data-hs-anchor=\"true\"><\/a><\/p>\n<h2>Why is <i>riba <\/i>forbidden?<\/h2>\n<p>In short, riba is an exploitative arrangement that keeps the poor in precarious financial circumstances as the poor are stuck with ever-growing debts whilst the rich increase their wealth without creating any extra value.<\/p>\n<p>The rich make money from their money and the poor pay to use money they don\u2019t have \u2013 thereby cementing the gap between the rich and the poor.<\/p>\n<p>It\u2019s not just Islam that sees <i>riba<\/i> as a negative thing. Greek philosopher Aristotle\u2019s classicist view against interest was expressed when he said: \u201cThe most hated sort (of wealth getting) and with the greatest reason, is usury, which makes a gain out of money itself and not from the natural object of it. For money was intended to be used in exchange but not to increase at interest\u2026 Therefore of all modes of getting wealth, this is the most unnatural.\u201d<\/p>\n<p>We have previously written a two-part series on the more academic, esoteric reasons why riba is haram <a href=\"https:\/\/islamicfinance.guru\/articles\/islamic-finance\/interest-haram-part-one\" rel=\"noopener\">here<\/a> and <a href=\"\/articles\/personal-finance\/is-life-insurance-haram-or-halal\" rel=\"noopener\">here<\/a>.<\/p>\n<p><a id=\"Ribaandthemodernday\" data-hs-anchor=\"true\"><\/a><\/p>\n<h2><i>Riba <\/i>and the modern day<\/h2>\n<p>Interest is central to the modern banking system. This is a significant reason for the reluctance of Muslims to engage fully with the financial sector.<\/p>\n<p>The Prophet said: \u201cThere will come a time when there will be no one left who does not consume <i>riba<\/i>, and whoever does not consume it will nevertheless be affected by residue.\u201d <i>[An-Nasa\u2019i]<\/i><\/p>\n<p>Now, IslamicFinanceGuru is looking to bring Muslims back to a level playing-field by enabling Muslims to make effective and halal financial decisions without having to fall into <em>riba<\/em>.<\/p>\n<p>Check out our resources on <a href=\"https:\/\/www.islamicfinanceguru.com\/islamicmortgages\/\">Islamic Mortgages<\/a> and <a href=\"https:\/\/www.islamicfinanceguru.com\/halal-investments\/\">Halal Investments<\/a> and, if you have any questions, we have a dedicated <a href=\"https:\/\/forum.islamicfinanceguru.com\/\">Forum<\/a> monitored by Islamic Finance Muftis.<\/p>\n<p>This definition is part of the <a href=\"https:\/\/www.\/islamicfinanceguru.com\/islamic-finance-definitions-series\/\">Islamic Finance Definition Series<\/a>.<\/p>\n<h3>Further reading:<\/h3>\n<p><a href=\"https:\/\/classicalwisdom.com\/greek_books\/politics-by-aristotle-book-i\/4\/\">https:\/\/classicalwisdom.com\/greek_books\/politics-by-aristotle-book-i\/4\/<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8211; What does Islam say about riba? &#8211; Why is riba forbidden?&nbsp; &#8211; Riba and the modern day &nbsp; Riba is an Arabic word meaning \u2018to increase\u2019 or \u2018to exceed\u2019.<\/p>\n","protected":false},"author":30,"featured_media":7009,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":"","wds_primary_category":0},"categories":[6],"tags":[33],"acf":[],"_links":{"self":[{"href":"https:\/\/www.islamicfinanceguru.com\/wp-json\/wp\/v2\/posts\/7008"}],"collection":[{"href":"https:\/\/www.islamicfinanceguru.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.islamicfinanceguru.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.islamicfinanceguru.com\/wp-json\/wp\/v2\/users\/30"}],"replies":[{"embeddable":true,"href":"https:\/\/www.islamicfinanceguru.com\/wp-json\/wp\/v2\/comments?post=7008"}],"version-history":[{"count":0,"href":"https:\/\/www.islamicfinanceguru.com\/wp-json\/wp\/v2\/posts\/7008\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.islamicfinanceguru.com\/wp-json\/wp\/v2\/media\/7009"}],"wp:attachment":[{"href":"https:\/\/www.islamicfinanceguru.com\/wp-json\/wp\/v2\/media?parent=7008"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.islamicfinanceguru.com\/wp-json\/wp\/v2\/categories?post=7008"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.islamicfinanceguru.com\/wp-json\/wp\/v2\/tags?post=7008"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}