Riba
ربا
Pronunciation: RIH-bah
Interest or usury — the most strictly prohibited practice in Islamic finance.
Definition
Interest or usury. One of the most strictly prohibited practices in Islamic finance, condemned in the strongest terms in the Quran (2:275-279). Includes any guaranteed, predetermined return on a loan or deposit regardless of the underlying economic outcome.
There are two types: (1) Riba al-Nasiah — interest charged on a loan based on time and amount (the most common form); and (2) Riba al-Fadl — exchanging unequal quantities of the same commodity (e.g., gold for gold in unequal amounts). Conventional mortgages, personal loans, credit card interest, and savings account interest are all forms of riba. The prohibition drives the entire Islamic finance industry, which has developed alternative structures like Murabaha, Musharakah, and Ijara to meet financing needs without interest.
Related Terms
Halalحلال
Permissible under Islamic law — in finance, products and transactions that comply with Shariah principles.
Haramحرام
Prohibited under Islamic law — in finance, includes interest-based products and investments in prohibited industries.
Ghararغرر
Excessive uncertainty or ambiguity in a contract — one of the three major prohibitions in Islamic finance.
Maysirميسر
Gambling or games of chance — one of the three major prohibitions in Islamic finance.
Murabahaمرابحة
A cost-plus sale where the seller discloses the original cost and adds a transparent, agreed-upon markup.
Ijaraإجارة
A lease or rental agreement — one of the three main halal home financing structures used in Canada
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Riba (ربا) — Interest or usury — the most strictly prohibited practice in Islamic finance. Interest or usury. One of the most strictly prohibited practices in Islamic finance, condemned in the strongest terms in the Quran (2:275-279).
- Interest or usury — the most strictly prohibited practice in Islamic finance.
- Category: Prohibitions
- Related: Halal, Haram, Gharar, Maysir, Murabaha, Ijara
- Compare related Shariah-compliant products on HalalWallet
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Reviewed by: HalalWallet Editorial Team
Last reviewed: 2026-07-01
Editorial Team, HalalWallet
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