CASE 1

Riba is referred to as an excess on the principal amount

given for a loan (i.e.interest)

Mary was urgently needed to borrow RM1000 from Adam.

After a week, she paid back the RM1000 to Adam. If Adam
asks her to return an additional amount, say RM 100 for
helping her by merely lending her the money, that RM100
is clearly riba. This is not allowed and prohibited in Islam
because it is considered as an oppression to the needy. At
the same time, Adam would have received the money
without working or using his own effort.

CASE 2
The longer the period offered in installment payment, the
more the amount payables clearly represent riba.

A set of electrical appliances can be purchased at

RM800.00 on cash terms. However, if you pay through an
installment scheme, you end up paying something like
RM15.00 per week for 18 months. The total payment
would amount to RM1080.00. Thus, you have to pay an
extra RM280 if you choose to pay in an 18-month period.
This shows that an advance or additional sum (in addition
to the original price), called interest charge, is calculated
based on the repayment period payable. It is based on a
fixed interest rate according to the repayment period. The
interest charged in this scheme is considered riba.
CASE 3:

The sale of unequal goods is clearly involved riba.

If one dirham of dates of high quality, are exchanged on the

spot with two dirhams of poor quality dates, then this is riba
al-fadl and is prohibited. Similarly, if 50 grams of gold
jewellery with intricate work requiring hours of labor is
exchanged on the spot for 40 grams of simple gold, then this
is riba al-fadl.