Is interest (riba) haram in Islam?

Riba is one of the gravest sins in Islam, explicitly prohibited in Quran 2:275-279, where Allah declares war against those who deal in riba.

Types of riba: 1. Riba al-Nasi'ah: Interest on loans (the most common modern form). 2. Riba al-Fadl: Unequal exchange of identical commodities (gold for gold, etc.).

The Prophet ﷺ cursed the one who consumes riba, the one who pays it, the one who records it, and its two witnesses (Sahih Muslim 1598).

Modern implications: Conventional banking interest, interest-based mortgages, credit card interest, and interest-bearing savings accounts all fall under riba.

Alternatives: Islamic finance offers murabaha (cost-plus sale), ijarah (leasing), musharakah (partnership), and mudarabah (profit-sharing). Many countries now have Islamic banks providing halal alternatives.

If one is forced into interest-based dealings due to necessity (e.g., a mandatory bank account in some countries), scholars permit minimum engagement and recommend donating any interest received to charity without intending reward.