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Riba (ربا; lit. "increase") is a financial concept from pre-Islamic times adopted by Islamic law which is similar to usurious interest. Despite generally being understood by common Muslims as referring to any form of interest whatsoever, the exact nature of Riba is not clearly outlined in Islamic scriptures and is thus widely debated among traditional Islamic scholars. In addition to contrary indications as to the meaning of Riba in scripture, there exist no authentic hadith which attempts to define Riba in universally applicable terms, although examples are given for what constitutes Riba in the case of specific items (such as gold and wheat).  Nonetheless, Riba is mentioned and prohibited in grave terms by the Quran several times. In a hadith in Sahih Bukhari, Umar is reported to have said, "I wish Allah's Apostle had not left us before he had given us definite verdicts concerning three matters." One of three matters, Umar says, is the "various types of Riba".
The lack of clarity regarding the nature of Riba combined with the difficulty of conducting commerce and managing large-scale economies without the use of basic types of interest has created significant obstacles for the implementation of Islamic economic ideas in the world today. In medieval times in Muslim as well as Christian lands, difficulties with the simultaneous prohibition on and need for interest-based loans sometimes led to the use of Jewish bankers as middlemen who were comfortable transacting in interest. These same difficulties led to the creation of technical legal loopholes whereby interest would effectively be permitted by certain schools (madhhabs) of Islamic law.
In the Quran
Theologians have struggled with verse 275 of Surah Baqarah for the reason that it apparently condemns practitioners of Riba to Hell for eternity without making an exception for Muslim practitioners of Riba, even though it is generally held that only unbelievers will be made to reside in Hell for eternity.
In the hadith
Grade: Hasan (Darussalam)