Riba refers to interest paid on loans, which is prohibited in Islam. There are two main types of riba - riba al-nasiyah which is interest on loans, and riba al-fadl which involves exploiting unequal exchanges of commodities. The Quran and hadith clearly forbid riba. Riba causes injustice, greed, inflation and burdens poor nations with unsustainable debt. Muslims should avoid taking out loans with interest and instead use riba-free banking options or borrow from family/friends interest-free. Strictly following Islamic financial principles can help society avoid the harms of riba.

1. Financial
RIBA And Its
Management Causes
LAILA MAZHAR | BS(IT) 6th Morning

2. WHAT IS RIBA?
 Riba is an Arabic noun derived
from the raba, meaning „to
increase‟, „to grow‟, and „to exceed‟.
It includes interest which is paid by
banks or on loans.
 "Riba` is a loan with the condition
that the borrower will return to

3. RIBA IN QURAN
 “…allah has permitted trade and
has forbidden riba.”
qur‟an 2:275
 “o you who believe, fear allah and
give up what remains of your
demand for riba, if you are indeed
believers. If you do it not, take

4. RIBA IN HADITH
 “allah has cursed the one who
consumes riba, the one who gives it,
the one who witnesses over it, and
the one who writes down the
transaction.”
 "There is no riba except in loaning."
(Nasaee 4504)
 "In any society, when riba becomes

5. TYPES OF RIBA
 Riba in loans (Riba Al-Nasiyah)
"That kind of loan where specified
repayment period and an amount in
excess of capital is
predetermined."
 Riba in excess (Riba al-Fadl )
“riba al fadl actually means

6. PROHIBITION OF Riba Al-Nasiyah
 Implies that the fixing in advance of
a positive rate of return on a loan
as a reward for waiting is not
permitted by the shari„ah.
 Hence Muslim clergy is saying that
interest on loan borrowed for
personal or business use is not
allowed due to fixed and

7. PROHIBITION OF Riba Al-FADL
 Spot exchange of dissimilar
commodities. (injustice and
exploitation is occurred).
 It relates to exploitation in trading.
 Trade is allowed with fair
knowledge of the prevailing prices
and the quality of goods being
purchased or sold on the part of both

8. CAUSES OF RIBA
 The causes of the six
kinds(GOLD,SILVER,DATES,WHEAT,SALT,BARLEY) to
be riba, are two of them, the cost
and the weight. As a result, there
are two groups; the first one is
the cost which contains the gold
and silver. The second one is the
weight which contains the rest.

9. 1. A Person exchanges gold for
gold or dates for dates and are
not the same in the cost or weight
with delay. There will be two riba,
Riba Al-Fadl which gold and dates
are not the same in the cost and
weight, and Riba Al-Nasiyah which
is the transaction is delayed or
not handed at the same time

10. 2. A Person exchanges gold for silver
or barley for salt and are not the
same in the cost or weight with delay.
There will be riba Al-Nasiyah, which
means the transaction is delayed.
Because there are in the same group
but not the same kind, which means it
must be handing in the same time or the
possession is delayed.
3. A Person exchanges gold for dates,

11. CONSEQUENCES OF RIBA
 Riba conflicts with the spirit of
brotherhood and sympathy, and is
based on greed, selfishness and hard
heartedness.
 Riba is one of the major contributors
towards inflation.
 Riba causes trauma and depression due
to mounting debts.
 Riba is a sure gain without any

12.  Riba creates a monopoly in society,
where the rich are rewarded for
being wealthy, while those who are
not are forced to pay extra!
 Whole nations, dozens of them,
large and small, have foreign debts
so large that their riba payments
on these debts are a crushing
burden on the entire country. Debt

13. Former President Obasanjo, commented
on the debt Nigeria faces:
“All that we had borrowed up to
1985 or 1986 was around $5 billion
and we have paid about $16 billion
yet we are still being told that we
owe about $28 billion. That $28
billion came about because of the
injustice in the foreign creditors‟
(lenders) interest rates.

14. HOW CAN WE AVOID RIBA?
 An obvious way to steer clear of
this evil is to not take out a loan
which involves paying riba.
 Opening up riba-free bank accounts.
 Not entering into contracts which
stipulate riba penalties, even
though one intends to pay on time.
 Meeting any conditions required to

15.  Borrowing money from family or
friends where possible.
 Dealing with Islamically compliant
banks.
 Renting if you cannot afford to buy
a house without riba.
 accepting/ organizing a “goodly
loan” (al-Qard al-Hasanah), which is
a loan by means of which one intends

16. CONCLUSION
None can doubt that riba is haram and a
major sin, and no disobedience to Allah is
worth the risk of His punishment. We must
remember that the life of this world is short
and fleeting, and that the purpose of our
existence is not to lust after beauty and
wealth, but rather to worship Allah
correctly and live by His rules. Just because
riba is widespread and common, it does not
make it permissible.
“and whosoever fears allah and keeps his

17. THANKYOU