Prohibition of Interest - Riba
The Islamic prohibition of usury and exploitative financial practices that harm society.
Riba (الربا) refers to interest or usury, strictly prohibited in Islam. The Quran declares that Allah has permitted trade but prohibited riba, and describes those who consume it as waging war against Allah and His Messenger. Riba creates wealth without productive effort, increases inequality, and transfers wealth from the poor to the rich. Islamic finance offers alternatives: profit-sharing (mudarabah), partnership (musharakah), and trade-based contracts. The prohibition of riba and its stern warning appear in Surah al-Baqarah 2:275-279.
Allah has permitted trade and forbidden interest.
Al-Ghazali explained that riba corrupts the soul through seeking wealth without effort or risk, and corrupts society by concentrating wealth unjustly.
Quran
Written about in
- What Islam says about justice
Trade is permitted and interest is forbidden. The line being drawn is between profit from shared risk and profit from another person's need.