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WHAT IS RIBA?
Riba literally means
expansion or growth.

increase,

addition,

It refers to the premium that must be paid by

the borrower to the lender along with the
principal amount as a condition for the loan or
for an extension in its maturity.

This means the charging of interest, which is

forbidden by the Quran.

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POSITION OF ISLAM ON
TIME VALUE OF MONEY
The prohibition of interest in Islam is not because
Islam denial the recognition of time value of money
since time value of money has been recognized in
Murabahah sells.

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POSITION OF THE QURAN

FROM THE RIBA
The Quran strictly prohibits Muslims from any
dealings that involve usury (riba). This prohibition
appears in many Quranic verses. The Prohibition of
riba came into four stages as follows:

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1ST STAGES
THE QURAN DIFFERENTIATE
BETWEEN RIBA AND CHARITY
The first verse revealed on riba in Mecca (al-Rum,
30:39), emphasized that :

while interest deprived one of the wealth of

Allahs blessings,
zakah/charity raised it many times.

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(AL-RUM- 30:39)






And that which you give in gift (to others), in
other that it may increase (your wealth by
expecting to get a better one in return) from
other peoples property, has no increase with
Allah; but that which you give in Zakat seeking
Allahs Countenance, then those they shall have
manifold increase. (al-Rum, 30:39)
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2ND STAGES
DISAPPROVAL OF RIBA AND SEVER PUNISHMENT

The second Quranic verse on riba in (Surat An

Nisa 4:161) disapproved dealing with interest.
It placed those who took riba similar to those
who wrongfully appropriated other peoples
property and threatened both with severs
punishment from Allah.

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That they took riba (usury), though they were
forbidden and that they devoured mens substance
wrongfully We have prepared for those among men
who reject faith a grievous punishment.
(Sura An Nisa 4:161).

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3RD STAGES
WARN THE MUSLIM FROM DEALING
WITH RIBA

The third revelation, around the second or third

year after Hijra (Al-Imran 3:130), instructed
Muslims to keep away from riba if they desired
their own welfare.

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O you who believe! Eat no riba doubled and

multiplied, but fear Allah that you may be successful.
And fear the Fire, which is prepared for the
disbelievers. And obey Allah and the Messenger
(saws) that you may obtain mercy.
(Al-Imran 3:130)
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4TH STAGES
TOTAL PROHIBITION OF RIBA

The fourth stage witnessed the total and complete

prohibition of riba (i.e. its eradication from the Muslim
society) and its replacement with trading.
The last stage of prohibition of riba came in surat alBaqarah: 275-279

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)(2:275-279

) (275

) (276




) (277
) (278

)(279
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AL-BAQARA (2:275-279)
Those who devour usury will not stand
except as stand one whom the Evil one by
his touch Hath driven to madness. That is
because they say: "Trade is like usury,"
but Allah hath permitted trade and
forbidden usury. Those who after
receiving direction from their Lord, desist,
shall be pardoned for the past; their case is
for Allah (to judge); but those who repeat
(The offence) are companions of the Fire:
They will abide therein (for ever).

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276. Allah will deprive usury of all blessing, but will

give increase for deeds of charity: For He loveth not
creatures ungrateful and wicked. 277. Those who believe, and
do deeds of righteousness, and establish regular prayers and
regular charity, will have their reward with their Lord: on
them shall be no fear, nor shall they grieve 278. O ye who
believe! Fear Allah, and give up what remains of your
demand for usury, if ye are indeed believers. 279. If ye do it
not, Take notice of war from Allah and His Messenger. But if
ye turn back, ye shall have your capital sums: Deal not
unjustly, and ye shall not be dealt with unjustly.
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POSITION OF THE SUNNAH FROM

RIBA
The Prophet (pbuh) used the strongest possible
language to emphasize the big sin when
dealing with riba as come in many ahadith:

Abu Huraira (pbuh) said that the Messenger

of Allah said: Riba is of seventy different kinds
the least grave being equivalent to a man
marrying his own mother.
Abdullah ibn Hanzala reported that the
Messenger of Allah said: A dirham (silver coin)
of riba, which a man receives knowingly, is
worse than committing adultery thirty-six
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times. (Ahmad)

Prohibition of Riba on The Bible

Prohibition of Riba (Usury in the Bible)

"If you lend money to any of my people
with you who is poor, you shall not be to
him as a creditor, and you shall not
exact interest from him. (Exodus
22:25)
Do not charge your brother interest,
whether on money or food or anything
else that may earn interest.
(Deuteronomy 23:19)

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THE TYPES OF RIBA

Muslim jurists classified riba in two types:

Riba al-jahiliya or Riba an-Nasiah.

Riba al-Fadl.

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1. RIBA AL-JAHILIYA OR RIBA AN-NASIA

(INTEREST IN DEBT/ DEFERMENT IN A LOAN OR
DEBT)

The term nasia means to postpone, defer, or

wait, and refers to the time that is allowed to
the borrower to repay the loan in return for the
addition or the premium. Hence riba al nasia
refers to the interest on loans.
The prohibition of riba al nasia implies that
the fixing in advance of a positive return on
a loan as a reward for waiting is not permitted
by the shariah.
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2. RIBA AL-FADL

Riba al-Fadl

Riba al-Fadl (interest in barter). It is based on sales

or exchanges in which there is an excess without any
counter-value).
Riba al-fadl is the excess over and above the loan paid
in kind. It lies in the payment of an addition by the
debtor to the creditor in exchange of commodities of the
same kind.

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HADITH RIBA AL-FADLE

(
).

()
(gold for gold, silver for silver, wheat for wheat, dates for
dates, barley for barley, and salt for salt, like for like , hand
in hand).
(If these types are different then sell as you like, if hand in
hand),
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