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Types of Riba

Question and answer details
Renat
Types of Riba
2010-01-10
I would like to know about the different types of Riba: Riba Al-Jahiliyyah, Riba Al-Fadl, and Riba An-Nasee’ah. What is the difference between them? Thank You!
Monzer Kahf
Answer
In the Name of Allah, Most Gracious, Most Merciful.

All praise and thanks are due to Allah, and peace and blessings be upon His Messenger.

Dear brother in Islam, we would like to thank you for showing keenness on knowing the teachings of Islam, and we appreciate the great confidence you have in us. We hope our efforts meet your expectations.

Responding to the question, Dr. Monzer Kahf, Scholar in Islamic Economics & Financial Expert, states the following:

“Generally speaking, Riba is defined as any contractual (conditional) increment in a loan contract or an exchange contract of certain items; it doesn't matter if it is money or any other standardized commodity.

Riba Al-Jahiliyyah is the Riba in loans. It could be when a loan contract is made or at rescheduling a previous debt. Many people say the second form was more common among the Arab people of Jahiliyyah, or the Pre-Islamic Period. All scholars agree that the reference to Riba in the Qur'an is to this one. It takes place only in debts created via lending or extended to a new maturity via rescheduling.

Riba Al-Fadl, is only mentioned in Hadith. It occurs in exchange contracts only. It applies to six items: gold, silver, date, raisin, wheat and barley and the like of them. The six items are mentioned in the Sunnah. Any contemporary money has the same ruling as gold and sliver. Fadl means surplus or excess. When exchanging within an item, i.e., wheat for wheat or silver for silver, exchange must be cash only and at equal quantity, i.e., with immediate delivery of all quantity exchanged at the time of contract. If sale is done between the four food items or between the two money item quantities may differ but delivery must remain immediate. Prohibition of Riba Al-Fadl is a kind of a protection of the prohibition of Riba that is mentioned in the Qur'an.

In the Arabic language, Nasee’ah means time span. Riba An-Nasee’ah stands for any Riba that has time span; it is any additional amount added to the premium of the loan because of the late time of having the money. As you see it may cover a type of Riba Al-Fadl and Riba of debts.”

May Allah guide you to the straight path, and guide you to that which pleases Him, Amen.

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