Riba is the Arabic term for interest or usury: any guaranteed, predetermined return on a loan, or an unequal exchange of the same commodity. It is prohibited in Islam, and avoiding it is the central idea of Islamic finance.

Riba covers conventional bank interest as well as unequal or delayed exchange of ribawi items like gold and currency. It's the reason Islamic banks, sukuk, and Shariah-compliant funds exist — they build returns around real assets and shared risk instead of fixed interest.

In Pakistan: Islamic banks (such as Meezan), Islamic funds, and sukuk are structured specifically to avoid riba.

Example: a fixed "guaranteed 15% return" on money you lend is riba; a profit share from a real business or asset is not.

Don't confuse it with: profit — which is halal when it comes from genuine ownership and risk.

Related terms: Ribawi item · Gharar · Shariah-compliant · Sukuk Where you'll meet this: Is digital gold halal?