Allah sent His messengers, revealed His books, and detailed the laws of His religion to establish comprehensive justice in all aspects of life, including economic, social, political, and military domains. Allah says, “We have already sent Our messengers with clear evidences and sent down with them the Scripture and the balance that the people may maintain [their affairs] in justice.” (Al-Hadid: 25) He also says, “Indeed, Allah orders justice and good conduct and giving to relatives and forbids immorality and bad conduct and oppression. He admonishes you that perhaps you will be reminded.” (An-Nahl: 90)

To achieve economic and social justice in an Islamic state, Islam has declared war against riba (usury). Many ayahs in the Quran and noble hadiths of the Prophet ﷺ categorically prohibit usury, considering it one of the major sins that bring ruin in this world and the Hereafter.

Bank interest is one of the clearest forms of riba that Islam has prohibited. The Muslim Ummah has reached a consensus on the prohibition of bank interest, and numerous fatwas have been issued by scholarly institutions and Islamic jurisprudential councils affirming its prohibition.

Despite the clarity of this prohibition, occasionally voices emerge—lacking strong scholarly foundation but supported by media—claiming that bank interest is permissible. They argue that it is a modern transaction not explicitly addressed in Islamic texts and that the default principle in transactions is permissibility unless explicitly forbidden.

To clarify the matter further, this article will outline the scholarly definition of riba, its types, and the classification of bank interest within these categories.

Definition of Riba

1. Imam Al-Zajjaj (d. 311 AH) defined riba in his tafsir ⁽¹⁾ as: “Riba is every loan from which more is taken in return or that entails a benefit.”
2. Another form involves lending money for a fixed period while taking a set amount monthly as interest. If the debtor cannot repay the principal amount when due, an extension is given with additional interest. This form of riba is prevalent in banks and other institutions in our countries today. Allah prohibited it for both Muslims and non-Muslims alike. ⁽²⁾

Types of Riba

Riba is of two types: Riba al-Nasi’ah, the riba practiced during pre-Islamic times (usury of delay) and Riba al-Fadl (usury of excess).

Riba al-Nasi’ah: In its definition Imam Al-Nisaburi said: In pre-Islamic times, people lent money for a set period, demanding a fixed amount each month. When the debt was due, they would demand the principal. If the debtor failed to pay, they extended the term with increased interest. ⁽³⁾

Al-Jassas said about Riba al-Nasi’ah: A delayed loan with a stipulated increase, where the increase serves as compensation for the delay.

Riba al-Fadl: This occurs when an item is exchanged for the same type but in unequal amounts and in hand-to-hand transactions, such as selling one gram of gold for two grams of gold in immediate exchange.

Ruling on Riba

Riba is categorically haram (prohibited) in the Quran, Sunnah, and by scholarly consensus.

In the Quran, there are many ayahs indicate its prohibition, such as Allah’s saying: “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. Allah destroys interest and gives increase for charities. And Allah does not like every sinning disbeliever. Indeed, those who believe and do righteous deeds and establish prayer and give zakah will have their reward with their Lord, and there will be no fear concerning them, nor will they grieve. O you who have believed, fear Allah and give up what remains [due to you] of interest, if you should be believers. 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.” (Al-Baqarah: 275-279)

As from the Sunnah, there are many hadiths including:

Abu Hurairah reported that the Prophet ﷺ said: “Avoid the seven noxious things.” When his hearers asked, “What are they, messenger of God?” He replied, “Associating anything with God, magic, killing one whom God has declared inviolate without a just cause, devouring usury, consuming the property of an orphan, turning back when the army advances, and slandering chaste women who are believers but indiscreet.” (Agreed Upon)

Jabir said: “The Messenger of Allah (ﷺ) cursed the one who accepted usury, the one who paid it, the witness to it, and the one who recorded it.” (Narrated by Muslim, At-Tirmidhi, and Ahmad)

Bank interest corresponds precisely to the definition of riba. In fact, it aligns with the worst and most prohibited type of riba—Riba al-Nasi’ah prevalent during pre-Islamic times. This becomes even clearer when examining the definitions provided by economists for banks interests.

Banks Interests

Economists define interest as a fixed, predetermined percentage of the principal amount agreed upon in advance, which the debtor pays to the lender in return for using the money. It represents the lender's annual return or compensation for the delay in payment. ⁽⁵⁾

This definition accurately depicts the reality of modern banking practices. As such, Islamic scholars have declared that bank interest is identical to the prohibited riba mentioned in Islamic texts. In fact, it is considered even worse than the riba practiced during pre-Islamic times.

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1. Tafsir Al-Zajjaj (4/187), Alam Al-Kutub, Beirut, 1st Edition, 1408 AH/1988 CE.
2. The Book of Fiqh on the Four Schools of Thought (2/222), Abd Alrahman Al-Jaziri (d. 1360 AH), Dar Al-Kotob Al-Ilmiyah, Beirut, Lebanon, 2nd Edition, 1424 AH/2003 CE.
3. Tafsir Al-Nisaburi (2/60), Ed. Sheikh Zakariya Umairat, Dar Al-Kotob Al-Ilmiyah, Beirut, 1st Edition, 1416 AH.
4. Ahkam Al-Quran by Al-Jassas (2/186), Ahmad ibn Ali Abu Bakr Al-Razi Al-Jassas Al-Hanafi (d. 370 AH), Dar Ihya al-Turath al-Arabi, Beirut, 1405 AH.
5. Evaluating the Banking Experience, Dr. Abdul Hamid Al-Ghazali and Dr. Adel Eid, Dar Al Salam for Publishing & Distribution, Cairo, 1st Edition, 1434 AH/2013 CE, pp. 66–67.

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