Prohibition of Interest
The "Prohibition of Interest," also known as Riba, refers to the Islamic principle that forbids charging or paying interest on loans. This concept is rooted in the belief that money should not generate more money without any productive effort. Instead, financial transactions should be based on profit-sharing or risk-sharing arrangements, promoting fairness and social justice.
In many Islamic countries, this prohibition influences banking practices and financial systems. Islamic finance offers alternatives, such as Murabaha (cost-plus financing) and Mudarabah (profit-sharing), which comply with these principles. The aim is to create a more equitable economic environment that benefits all parties involved.