The Concept of Riba in Islamic Banking Law: An Introduction
Journal of International Banking Law & Regulation, Vol. 26, Issue 10, pp. 405-411, 2011
9 Pages Posted: 6 Oct 2011 Last revised: 20 Dec 2012
Date Written: October 4, 2011
This article provides a short overview of "riba", the principal feature of Islamic banking law. Riba refers to certain prohibitions against charging and paying interest on loans and prohibitions against certain other transactions to protect debtors. Sources of Islamic law are reviewed to explain the concept of riba, and rationales for the proscriptions against riba are surveyed. Modern investment principles and loans based in sharia law are also briefly discussed.
Keywords: Banking; Financial instruments; Interest; Islamic finance; Islamic law; Sharia
JEL Classification: E43, E49, E51, E59, F30, F34, F39, G29, K12, K19, K29, K39
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