The Prohibition of Riba
Dear Brothers and Sisters in Islam
Please read about Riba
"Wheat is exchanged for wheat in equal quantity and handed hand to hand; the surplus being riba... Money is to be exchanged with money, in equal quantity, hand to hand; the surplus being riba. Gold is to be exchanged with gold, in equal quantity and hand to hand; the surplus being riba."
[Muslim]
The Arabic term "riba" is derived from the verb "raba" which means "to increase, "to grow." The idea entailed in the notion of riba is that of an increase without a service or work given in exchange. It is an increase of capital by and on the capital itself.
This hadith points out that there is also a form of riba in situations of unequal exchange. This is the "the usury of exchange" or "on sales". From this hadith comes the idea of equality and simultaneity in exchange so that the terms of exchange between the two parties are very clear.
The prohibition of riba, which is the moral axis around which economic thought in Islam is elaborated, calls believers to express a categorical rejection of an order which has respect only for profit and which suppresses justice and humanity. In the same élan, this prohibition imposes upon them the need to think and elaborate a model, which ought to come near to respect for this injunction.
In
the Name of Allah, Most
Gracious, Most Merciful