Riba

Riba is a concept in Islamic jurisprudence that includes prohibited interest or stipulated excess in specified exchanges. Islamic financing structures therefore seek lawful returns through genuine transactions such as sales, leasing or profit-sharing rather than simply describing an interest-bearing loan with a different name. The detailed classification depends on the transaction and relevant Sharia interpretation. In financial-management questions, explain the source of a return and the allocation of risk, rather than assuming that all profits or all deferred payments are prohibited.