The Riba-Interest Equivalence: Is There an Ijma (Consensus)?

Abstract

In Islam Riba is categorically haram (prohibited). Riba is commonly equated with interest and thus interest is considered blanketly prohibited as well. Also, it is claimed that there is an Ijma (consensus) about the Riba-Interest equivalence. This paper surveys the claim of that consensus and presents evidence that in recent centuries the consensus has been weakened and there are many voices among contemporary Muslim academics, scholars and experts who do not subscribe to the Riba-Interest equation or equivalence. In this survey, also earlier positions are identified that are at odd with the Riba-Interest equivalence.

Keywords: Riba, Interest, Riba-Interest equation, Islamic banking, Islamic finance

JEL Classification: Z12