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Home > QFINANCE Dictionary > Definition of riba

Definition of

riba

Finance

interest charge or unfair profit in Islamic financing, interest or any unjust profit made by a lender in a financial transaction. It is one of three prohibitions in Islamic law, the others being gharar and maysir.

riba - Related Articles
  • Alternatives to Riba in Islamic Finance

    Checklists

    This checklist describes Islamic profit sharing, leasing, equity sharing, and asset trading alternatives to riba (interest) including musharakah, mudarabah, murabahah, salam, and ijarah.

  • Islamic Insurance Markets and the Structure of Takaful

    Best Practice

    Objections relating to the insurance contract itself are those of riba (usury), gharar (uncertainty), and maysir (gambling). The other objections relating to market practice are usually concerned with two issues: The first is that insurance companies’ investment policies are generally interest
    By Suzanne White

  • Islamic Modes of Finance and the Role of Sukuk

    Best Practice

    All modes are based on the principle of riba (interest) prohibition, and all seek to maintain Islamic business ethics (freedom and leniency of transactions, recognition of and regard for private property, and justice).
    By Abdel-Rahman Yousri Ahmad

  • Identifying the Main Regulatory Challenges for Islamic Finance

    Best Practice

    For the layman, the fundamental difference between Islamic finance and conventional finance is the feature in the latter to put a cost on money in financial transactions, i.e. interest, or riba as it is known in the Islamic financial world. Basically, whatever is borrowed has to be returned
    By Bilal Rasul

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Definitions of ’riba’ and meaning of ’riba’ are from the book publication, QFINANCE – The Ultimate Resource, © 2009 Bloomsbury Information Ltd. Find definitions for ’riba’ and other financial terms with our online QFINANCE Financial Dictionary.

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