In Islam, the concept of usury, known as ‘riba’ in Arabic, holds significant importance and carries specific implications in financial transactions. ‘Riba’ encompasses the notion of exceeding or increasing, often translated to denote ‘usury’ or ‘interest.’ Its essence lies in the prohibition of unequal exchanges or transactions that result in the payment of interest. Within Islamic finance, the charging or receiving of interest is considered haram, or forbidden, as it creates inequitable arrangements and can lead to exploitation.
Islamic teachings emphasize fairness and equity in economic dealings, aiming to foster social justice and ethical conduct. The prohibition of usury aligns with these principles, as it prevents exploitative practices that can lead to economic imbalance and social unrest. Instead, Islamic finance promotes alternative mechanisms such as profit-sharing arrangements, asset-backed financing, and risk-sharing partnerships, which prioritize mutual benefit and ethical standards.
In essence, the concept of usury in Islam reflects a broader commitment to financial ethics and social responsibility. By prohibiting interest-based transactions and emphasizing equitable exchanges, Islamic finance seeks to establish a financial system that fosters inclusive growth and sustainable development while upholding ethical principles. Thus, understanding and adhering to the prohibition of usury is fundamental in aligning financial practices with Islamic values and principles.
(Response: Usury in Islam refers to the prohibition of interest-based transactions, emphasizing fairness and equitable exchanges in financial dealings to uphold ethical principles and foster inclusive growth.)