reading time ~15 mins

1. Riba ربا
   1. Status in Islam
2. Types of Riba
   1. Riba al Nasiah
   2. Riba al Fadl
3. Riba in Quran
4. Riba in Sunnah
   1. Riba is Like Dust
   2. Payer and Receiver are Cursed
   3. Exchanging same commodity in unequal amounts is forbidden
   4. Virtue comforts and Sin discomforts Heart – leave doubtful things
5. Other Considerations
   1. Evils of Riba
   2. What about Inflation
6. Summary
7. Additional Reading

Riba ربا

Riba is an Arabic word that means “to increase” or “to exceed” and is commonly used in reference to unequal exchanges or charges and fees for borrowing. Interest is deemed riba, or an unjust, exploitative gain, and such practice is forbidden under Islamic law

Sometimes the word usury is used in english to represent riba

Status in Islam

Riba is forbidden and one of the major sins. It is strongly condemned in the Quran and Sunnah

When God and His Messenger have decided on a matter that concerns them, it is not fitting for any believing man or woman to claim freedom of choice in that matter: whoever disobeys God and His Messenger is far astray

Quran 33:36

O you who have believed, do not put [yourselves] before Allāh and His Messenger but fear Allāh. Indeed, Allāh is Hearing and Knowing.

Quran 49:1

Types of Riba

Scholars categorise riba into two types 

1. Riba Al-Nasiah (pronounced na-see-ah): “The interest of delay”
2. Riba Al-Fadl: “The interest of excess.”

Riba al Nasiah

The most common and heinous form of riba, or interest transaction, is riba al-nasi‘ah (pronounced na-see-ah), meaning “the interest of delay.” This is the addition of a surplus or an extra amount to an originally transacted sum for the party awaiting delivery of what he or she has transacted for. Loans today almost always fall into the category of riba al-nasi‘ah. Any commodity that gains its increase simply because of time passing is riba al-nasi‘ah

The loan which is returned a while later is usually the interest of delay

Riba al Fadl

The interest of excess,” the Prophet, on him be peace, specified as a haram, or forbidden, business transaction. Riba al Fadl is the unequal exchange of the same commodities

E.g., Do not exchange your old gold jewellery for new gold jewellery in different amounts (because of new design, etc) – one must exchange gold for cash, and use cash to buy new jewellery

Riba in Quran

Allah (ﷻ) says the following about Riba in the Quran

1. Those who consume interest cannot stand [on the Day of Resurrection] except as one stands who is being beaten by Satan into insanity. That is because they say, “Trade is [just] like interest.” But Allāh has permitted trade and has forbidden interest. So whoever has received an admonition from his Lord and desists may have what is past, and his affair rests with Allāh. But whoever returns [to dealing in interest or usury] – those are the companions of the Fire; they will abide eternally therein (Quran 2:275) Al-Tabari reported: Ibn Abbas, may Allah be pleased with him, said, “It will be said on the Day of Resurrection to those who consumed usury: Take your weapon for war!” Then he recited the verse, “Those who consume usury cannot stand but as one stands who is being beaten by Satan into insanity.” (Quran 2:275) (tafsīr al-tabarī 2:279 sahih (authentic) according to Ahmad Shakir)
2. Allāh destroys interest and gives increase for charities. And Allāh does not like every sinning disbeliever (Quran 2:276)
3. O you who have believed, fear Allāh and give up what remains [due to you] of interest, if you should be believers. And if you do not, then be informed of a war [against you] from Allāh and His Messenger. But if you repent, you may have your principal – [thus] you do no wrong, nor are you wronged (Quran 2:278-279)
4. You who believe, do not consume usurious interest, doubled and redoubled. Be mindful of God so that you may prosper (Quran 3:130)
5. We forbade the Jews certain foods that had been lawful to them for their wrongdoing, and for hindering many from the Way of Allah, taking interest despite its prohibition, and consuming people’s wealth unjustly. We have prepared for the disbelievers among them a painful punishment (Quran 4:160-161)
6. Whatever loans you give, ˹only˺ seeking interest at the expense of people’s wealth will not increase with Allah. But whatever charity you give, ˹only˺ seeking the pleasure of Allah—it is they whose reward will be multiplied (Quran 30:39)

Riba in Sunnah

1. Ibn Mas’ud reported: The Prophet (ﷺ), said, “No one increases his wealth by usury except that his result will be little” (ibn majah 2279 sahih)

Riba is Like Dust

2. Abu Huraira reported: The Messenger of Allah (ﷺ) said, “A time will surely come upon people in which none will remain but that he consumes usury. If he does not consume it, he will be afflicted by its dust” (abi dawud 3331 sahih (authentic) according to Al-Suyuti)
3. The Messenger of Allah (ﷺ), said, “A time will come upon people when they will consume riba” They said to him, “Is that all of the people?” The Prophet (ﷺ) said, “Whoever does not take from it will be afflicted by its dust” (musnad ahmad 10191 sahih (authentic) according to As-Suyuti and Ahmad Shakir)

Payer and Receiver are Cursed

4. Jabir said that Allah’s Messenger (ﷺ) cursed the accepter of interest and its payer, and one who records it, and the two witnesses, and he said: They are all equal. (muslim 1598)
5. It was narrated from ‘Abdullah bin Mas’ud that the Messenger of Allah (ﷺ) cursed the one who consumes usury, the one who pays it, those who witness it and the one who writes it down. (ibn majah 2277 hasan)
6. It was narrated from Husain, Mughirah, and Ibn ‘Awn, from Ash-Sh’abi, from Al-Harith, from ‘Ali, that: The Messenger of Allah (ﷺ) cursed the one who consumes Riba, the one who pays it, the one who writes it down, and the one who withholds Sadaqah (Zakah). And he used to forbid wailing (in mourning for the dead) (an nasai 5103 hasan)
7. It was narrated from Ibn ‘Awn, from Ash-Sha’bi, from Al-Harith, who said “The Messenger of Allah (ﷺ) cursed the one who consumes Riba, the one who pays it, the one who writes it down and the one who witnesses it (an nasai 5104 hasan)
8. Abdullah ibn Mas’ud reported: The Prophet, peace and blessings be upon him, said, “Allah has cursed the one who consumes usury, its client, its witness, and its recorder. Usury and adultery do not become widespread among people but that they will become vulnerable to the punishment of Allah Almighty” (musnad aḥmad 3799 sahih (authentic) according to Ahmad Shakir)

Exchanging same commodity in unequal amounts is forbidden

9. Abu Hurairah said: The Messenger of Allah said: “Gold for gold, weight for weight, like for like; and silver for silver, weight for weight, like for like. Whoever gives more or takes more has engaged in Riba” (an nasai 4569)
10. Narrated Abu Bakra: Allah’s Messenger (ﷺ) said, “Don’t sell gold for gold unless equal in weight, nor silver for silver unless equal in weight, but you could sell gold for silver or silver for gold as you like” (bukhari 2175) (bukhari 2182) (muslim 1590a) (an nasai 4578)
11. Abu Hurairah narrated that the Prophet (ﷺ) said: “(Sell) silver for silver, gold for gold, barley for barley, wheat for wheat, like for like” (ibn majah 2255)
12. Abu Sa’id al-Khudri (Allah be pleased with him) reported Allah’s Messenger (ﷺ) as saying: “Do not sell gold for gold and silver for silver weight for weight or of the same quality” (bukhari 2176) (muslim 1584d)
13. A necklace having gold and gems in it was brought to Allah’s Messenger (ﷺ) in Khaibar and it was one of the spoils of war and was put to sale. Allah’s Messenger (ﷺ) said: The gold used in it should be separated, and then Allah’s Messenger (ﷺ) further said: “(Sell) gold for gold with equal weight” (muslim 1591a)

Virtue comforts and Sin discomforts Heart – leave doubtful things

1. Nawwas b. Sam’an al-Ansari reported: I asked Allah’s Messenger (ﷺ) about virtue and vice. He said: Virtue is a kind disposition and vice is what rankles in your heart and that you disapprove that people should come to know of it. (muslim 2553a)
2. Al-Hasan bin ‘Ali said: I remember that the Messenger of Allah (s.a.w) said: “Leave what makes you in doubt for what does not make you in doubt. The truth brings tranquility while falsehood sows doubt” another chain reports a similar narration (tirmidhi 2518)
3. Narrated An-Nu`man bin Bashir: The Prophet (ﷺ) said “Both legal and illegal things are obvious, and in between them are (suspicious) doubtful matters. So whoever forsakes those doubtful things lest he may commit a sin, will definitely avoid what is clearly illegal; and whoever indulges in these (suspicious) doubtful things bravely, is likely to commit what is clearly illegal. Sins are Allah’s Hima (i.e. private pasture) and whoever pastures (his sheep) near it, is likely to get in it at any moment” (bukhari 2051)
4. It was narrated that ‘Umar bin al-Khattab said: The last thing to be revealed was the verse on riba, but the Messenger of Allah (ﷺ) passed away and did not discuss it with us. So give up riba and doubtful things (musnad ahmad 246)

Other Considerations

Evils of Riba

The effect of interest is that the gap between financially strong and financially weak keeps growing until the poor become more and more dependent on the rich. The rich have control over all the resources and the poor start accepting the system (deen) of the rich

What about Inflation

Many people claim that due to inflation their wealth loses value over time, so can I take interest based on the inflation amount. Scholars have discussed this matter and deem any form of interest (even if purely based on inflation) as haram (strictly forbidden)

The example would be that we loan someone $100 for 5 years. At the time of repayment, the purchasing power of that $100 would possibly be reduced due to inflation, however it is still forbidden according to the scholars to charge any interest on this loan 

We must understand some aspects about this properly

1. The problem of inflation is related to modern economy being based on fiat currencies (which are not commodity backed)
2. The purpose of loans is to help others who are in need and not to make a profit or balance financial transactions
3. Money itself does not bring good or bad. It is the barakah in the money that really matters. This is why you can see that a grateful slave of Allah would be content with very little

Helpful tips 

• If you give a loan to someone, be aware of inflation and accept the loss. Do it for the sake of Allah, and expect barakah with whatever your receive
• One workaround (which is cumbersome) is to convert $100 into certain grams of gold and give the gold as a loan. At the time of return, the person would return the same grams of gold (which due to inflation could be worth $110)

Summary

1. Riba means to increase and usually refers to excess charges for borrowing or unequal exchanges of same commodities (e.g. unequal exchange of gold for gold)
2. Riba is strongly forbidden and a major sin in Islam
3. Engagement in riba is referred to as waging war against Allah (ﷻ) and His Messenger (ﷺ)
4. We as muslims must do our best to avoid riba
5. Riba is forbidden even if there is inflation in the currency
6. Even if you have doubts on the topic, the Prophet (ﷺ) advised us to avoid matters of doubt

Additional Reading

1. What is Riba (article Investopedia)
2. Fiat Currency and Inflation (article Investopedia)
3. What is Riba and how to avoid (article)
4. Interest and Inflation (article from Islamqa)
5. Types of Riba (article)