Darul Iftaa Mahmudiyyah

Please explain in detail the definition of Riba.

· 22 Shaʻban 1422 AH1 min readFatwa 4018English

Question

People don't understand the difference between Interest and Riba. My understanding is when an Owner is financing, he can use any 'interest rate' to set his profit. Riba gets in the picture if the financing is done by a third party (This is when, ONE FORSAKES THE PROPHET FOR PROFIT).

Answer

Rasulullah (Sallallaahu Alayhi Wasallam) said, 'Every loan that draws a profit is Riba and Haram'.

The Hadith is general. It includes the direct party being the owner as well as the third party.

and Allah Ta'ala Knows Best

Mufti Ebrahim Desai
FATWA DEPT.

Answered by
Mufti Ebrahim Desai
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Source: Darul Iftaa Mahmudiyyah — https://askimam.org/public/question_detail/4018
Fatawa SA: https://fatawa.co.za/fatwa/askimam-4018

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