Short answer: riba is any increase charged on a loan or a debt, or an unequal exchange of certain goods of the same kind. Bank interest on loans and savings is riba in the view of the major fiqh councils, and Islam forbids it completely: taking it, paying it, writing the contract and witnessing it. The Quran allows trade and forbids riba (2:275), and allows the lender back only the amount he lent (2:279).
What riba means
The Arabic word ribā means "increase" or "growth". In Islamic law it means an increase that has no lawful exchange behind it. The clearest form, and the one the Quran speaks of, is a lender asking for more than he lent because of time: "I lend you 1,000 if you pay me back 1,100." That extra 100 is riba, whether it is called interest, a fee, a percentage or a late charge.
English uses two words: usury for high or exploitative interest, and interest for any charge on a loan. Islam makes no such split. A small rate is as forbidden as a high one.
What the Quran says
The ban came in stages. A Makkan verse first said that riba does not grow with Allah (30:39). In Madinah the Quran forbade "doubled and multiplied" riba (3:130), and finally, in some of the last verses revealed, banned all of it:
ٱلَّذِينَ يَأْكُلُونَ ٱلرِّبَوٰا۟ لَا يَقُومُونَ إِلَّا كَمَا يَقُومُ ٱلَّذِى يَتَخَبَّطُهُ ٱلشَّيْطَٰنُ مِنَ ٱلْمَسِّ ۚ ذَٰلِكَ بِأَنَّهُمْ قَالُوٓا۟ إِنَّمَا ٱلْبَيْعُ مِثْلُ ٱلرِّبَوٰا۟ ۗ وَأَحَلَّ ٱللَّهُ ٱلْبَيْعَ وَحَرَّمَ ٱلرِّبَوٰا۟ ۚ فَمَن جَآءَهُۥ مَوْعِظَةٌۭ مِّن رَّبِّهِۦ فَٱنتَهَىٰ فَلَهُۥ مَا سَلَفَ وَأَمْرُهُۥٓ إِلَى ٱللَّهِ ۖ وَمَنْ عَادَ فَأُو۟لَٰٓئِكَ أَصْحَٰبُ ٱلنَّارِ ۖ هُمْ فِيهَا خَٰلِدُونَ ﴿٢٧٥﴾
Allazeena yaakuloonar ribaa laa yaqoomoona illaa kamaa yaqoomul lazee yatakhabbatuhush shaitaanu minal mass; zaalika bi annahum qaalooo innamal bai'u mishur ribaa; wa ahallal laahul bai'a wa harramar ribba; faman jaaa'ahoo maw'izatum mir rabbihee fantahaa falahoo maa salafa wa amruhooo ilal laahi wa man 'aada fa ulaaa 'ika Ashaabun naari hum feehaa khaalidoon
Those who consume interest cannot stand [on the Day of Resurrection] except as one stands who is being beaten by Satan into insanity. That is because they say, "Trade is [just] like interest." But Allah has permitted trade and has forbidden interest. So whoever has received an admonition from his Lord and desists may have what is past, and his affair rests with Allah. But whoever returns to [dealing in interest or usury] - those are the companions of the Fire; they will abide eternally therein.
Quran 2:275 · Sahih International · Read Surah Al-Baqarah
يَٰٓأَيُّهَا ٱلَّذِينَ ءَامَنُوا۟ ٱتَّقُوا۟ ٱللَّهَ وَذَرُوا۟ مَا بَقِىَ مِنَ ٱلرِّبَوٰٓا۟ إِن كُنتُم مُّؤْمِنِينَ ﴿٢٧٨﴾ فَإِن لَّمْ تَفْعَلُوا۟ فَأْذَنُوا۟ بِحَرْبٍۢ مِّنَ ٱللَّهِ وَرَسُولِهِۦ ۖ وَإِن تُبْتُمْ فَلَكُمْ رُءُوسُ أَمْوَٰلِكُمْ لَا تَظْلِمُونَ وَلَا تُظْلَمُونَ ﴿٢٧٩﴾
Yaaa ayyuhal lazeena aamanut taqul laaha wa zaroo maa baqiya minar ribaaa in kuntum mu'mineen Fail lam taf'aloo faazanoo biharbim minal laahi wa Rasoolihee wa in tubtum falakum ru'oosu amwaalikum laa tazlimoona wa laa tuzlamoon
(278) O you who have believed, fear Allah and give up what remains [due to you] of interest, if you should be believers. (279) And if you do not, then be informed of a war [against you] from Allah and His Messenger. But if you repent, you may have your principal - [thus] you do no wrong, nor are you wronged.
Quran 2:278-279 · Sahih International · Read Surah Al-Baqarah
Two points stand out. Those who said "trade is just like interest" are answered directly: Allah permitted one and forbade the other. And the lender who repents keeps his principal, "you do no wrong, nor are you wronged." Ibn Abbas said the verse of riba was among the last parts of the Quran to be revealed (reported in Sahih al-Bukhari).
What the Prophet ﷺ said
Jabir said: The Messenger of Allah ﷺ cursed the one who consumes riba, the one who pays it, the one who writes it down and its two witnesses, and he said: "They are all the same."
Sahih Muslim 1598, from Jabir ibn Abdullah
"Avoid the seven destroyers." He listed among them consuming riba.
Sahih al-Bukhari 2766; Sahih Muslim 89, from Abu Hurayrah
In his Farewell Sermon the Prophet ﷺ declared all riba of the time of ignorance cancelled, starting with the riba owed to his own uncle, al-Abbas (Sahih Muslim 1218).
The two types of riba
| Type | What it is | Example |
|---|---|---|
| Riba al-nasi'ah (riba of delay), also called riba al-duyun (riba of debts) | An increase charged for time on a loan or debt. This is the riba of the Quran, and all scholars agree it is haram. | A loan, mortgage, credit card or overdraft that charges interest; a late fee that grows with time |
| Riba al-fadl (riba of excess) | Swapping two amounts of the same kind of certain goods unequally, or with a delay. It is forbidden by the Sunnah to close the door to riba. | Trading 10 grams of old gold jewellery for 8 grams of new gold; swapping two kilos of poor dates for one kilo of good dates |
Riba al-fadl comes from the hadith of the six commodities:
"Gold for gold, silver for silver, wheat for wheat, barley for barley, dates for dates and salt for salt: like for like, equal for equal, hand to hand. If the kinds differ, sell as you wish, as long as it is hand to hand."
Sahih Muslim 1587, from Ubadah ibn al-Samit
The practical lesson from the dates story in the Sunnah: sell the poor dates for money, then buy the good dates with the money. Two clean sales, no riba.
Which goods does riba apply to? The four schools
All the schools agree on the six goods in the hadith. They differ on the reason (ʿillah) behind them, which decides what else is included, such as rice, money and metals.
The reason is being sold by measure of volume or weight (kayl or wazn) together with being the same kind. So riba al-fadl covers anything sold by weight or volume, food or not, such as rice, iron or copper, when exchanged for the same kind. Paper money is treated like gold and silver by contemporary Hanafi scholars.
Other madhhabs
- Shafi'i
- For gold and silver, the reason is being the price of things (thamaniyyah). For the other four, it is being food. So riba covers all foods of the same kind, but not iron or copper.
- Maliki
- For gold and silver, being the price of things. For the other four, being a staple food that can be stored (iqtiyat and iddikhar).
- Hanbali
- In the best known narration from Imam Ahmad, the same as the Hanafi view: things sold by volume or weight. Another narration agrees with the Shafi'i view.
Why is riba forbidden?
The first reason is simply that Allah forbade it, and that is enough for a believer. Scholars have also pointed to its harm:
- It is gain without risk. In trade and partnership both sides share the outcome. In a riba loan the lender is guaranteed his increase whether the borrower's project succeeds or fails.
- It falls hardest on those in need. People borrow when they are short, and a debt that grows with time can trap them for years.
- It cuts off kindness. The Quran asks the lender to give a struggling debtor time, and calls writing the debt off charity (2:280).
- It moves wealth upward. Money earns money for those who already have it. Zakat and charity move it the other way, which is why 30:39 sets riba and zakat side by side.
Riba today: banks, cards, mortgages and savings
In 1985 the International Islamic Fiqh Academy of the OIC ruled that any increase on a loan, and the interest that conventional banks pay and charge, is riba and haram (resolution 10, second session). Most fatwa bodies and scholars, including the major Hanafi institutions of South Asia, hold the same view. A minority of modern scholars have argued that some bank interest is not riba; the fiqh councils have rejected that view.
| Situation | The common position | What people often do instead |
|---|---|---|
| Savings account that pays interest | Do not use the interest for yourself | An Islamic or non-interest account. If interest has already been paid, give it away (see below) |
| Credit card | Paying interest is haram. Many scholars allow a card you always pay in full before any interest is charged, though some dislike signing the interest clause | A debit card or charge card |
| Conventional mortgage | Haram in the view of most scholars. A few councils allowed it under real need where no alternative exists | Islamic home finance (ijarah, diminishing musharakah, murabaha) from a provider with a credible Sharia board |
| Student and car loans with interest | The same as any interest loan | Saving first, interest-free loans, Islamic finance where available |
| Working in a bank | Jobs that write or witness riba contracts fall under the hadith of Jabir. Other roles are debated | Ask a scholar about your specific role |
These are summaries of widely held positions, not a fatwa for your case. Your local scholar can weigh your circumstances.
What to do with interest you have already received
Many Muslims have old savings that earned interest. The common guidance from contemporary scholars is:
- Keep your principal. It is yours (2:279).
- Give the interest away to the poor or to public good, without intending it as your own charity, since it was never yours to give. Do not use it for your own needs or count it as zakat.
- Repent and close or switch the account if you can.
- When you work out your zakat, include only your own money, not the interest.
Work out your zakat on clean wealth
Our zakat calculator uses live gold and silver prices and walks through cash, savings, gold and business stock, Hanafi first.
Open the zakat calculatorQuestions
Is all interest riba in Islam?
Yes, in the view of the four schools and the major fiqh councils. Any increase charged on a loan for time is riba, however small the rate.
Is a mortgage haram in Islam?
A conventional interest mortgage is haram in the view of most scholars. A few councils allowed it in cases of real need where no alternative exists. Islamic home finance products are the usual alternative.
Is using a credit card haram?
Paying interest on it is. Many scholars allow a card that you always clear in full before interest is charged, while some dislike agreeing to the interest clause at all. A debit card avoids the question.
What is the difference between riba and profit?
Profit comes from trade, where you sell goods or services and carry the risk. Riba is a guaranteed increase on money lent. The Quran draws exactly this line: Allah has permitted trade and forbidden riba (2:275).
What is the punishment for riba?
The Quran warns of "war from Allah and His Messenger" for those who do not give it up (2:279), and the Prophet ﷺ counted it among the seven destroying sins. The door of repentance stays open: give up what remains and keep your principal.
Sources
- Quran 2:275-280, 3:130, 4:161, 30:39. Translation by Sahih International.
- Sahih Muslim 1598 (the curse on all parties); Sahih al-Bukhari 2766 and Sahih Muslim 89 (the seven destroyers); Sahih Muslim 1587 (the six commodities); Sahih Muslim 1218 (the Farewell Sermon). Sahih al-Bukhari, Kitab al-Tafsir, the report of Ibn Abbas on the last verses revealed.
- Al-Marghinani, al-Hidayah, Bab al-Riba; Ibn Abidin, Radd al-Muhtar. Muhammad Taqi Usmani, An Introduction to Islamic Finance, and his Supreme Court of Pakistan judgment on riba (1999).
- International Islamic Fiqh Academy (OIC), resolution 10 (10/2), Jeddah, 1985, on bank interest.
- The other madhhabs' positions are summarised from al-Nawawi, al-Majmu (Shafi'i); Ibn Rushd, Bidayat al-Mujtahid (Maliki); Ibn Qudamah, al-Mughni (Hanbali).
The rulings on this page are pending review by the scholars on our team.