Ribā on loan

Q . What is ribā? And is the amount calculated as a percentage taken by the people who have deposits with the banks regarded as ribā?

A: As an expression, a ribā-bearing loan involves paying an extra amount by the borrower to the lender. The profits arising from the investment of the money deposited with a bank for safe keeping, which is used by the bank on behalf of the saver by virtue of an Islamic contract, is not considered ribā and, thus, is not problematic.

 

700 /