Riba is commonly translated to English to mean ‘interest’ or ‘usury’ which is essentially one charging someone else for the use of their money which also includes unequal exchanges.

An example of this would be taking a loan from someone who expects it to be repaid with an additional fee per month on anything that has not been paid at the end of each month.

The Holy Quran mentions about Riba “…but whoever returns (to dealing in Riba), such are the dwellers of the Fire — they will abide therein.” Qur’an 2:275

The next question would then be how to avoid Riba? This can be a very challenging and difficult task especially in the times we are living in a capitalist society. This makes it impossible to avoid Riba entirely. However, the financial system should not be used as an excuse to freely indulge in it. Here is how one can avoid Riba:

• Opt for Islamic financial institutions. Islamic financial institutions do not have the loopholes that an interest-based banking system has.
• Avoid contracts that stipulate interest penalties, even if you intend to pay on time.
• Make bill payments on time so as not to incur a late penalty.
• Dispose of the interest that the bank has given you. Do not return nor consume it. Rather, spend it on charitable causes.
• Consult scholars of Islam whenever you have a doubt. 

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Written By Yaseen Johaar