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Islamic Finance


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Why Is Riba al-Fadhl Haram?


Shari’a prohibits riba al-fadhl on the grounds that it involves injustice, deception, and trickery. In Islamic finance, there is no consideration for qualities when dealing in ribawi items (basically: wheat, barley, salt, dates, and of course gold and silver). As such, ribawi goods of high quality and poor quality should be exchanged at par, regardless of quality. This is to ensure that quality is not used as a pretext to trade on the basis of riba. Therefore, it is often said that the prohibition of riba al-fadhl will shut all doors or zharai’ that lead to riba.


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