Yes, the prohibition of charging or paying interest, known as riba, is a core and fundamental part of Sharia law and Islamic finance.
Key Aspects of the Prohibition
- Definition of Riba: Refers to any predetermined excess or interest charged over and above the principal amount on a loan.
- Religious Source: Forbidden explicitly through verses in the Quran and traditions (Hadith) of the Prophet Muhammad.
- Ethical Rationale: Viewed as exploitative and unjust because it guarantees a risk-free return to the lender while placing all the financial burden and risk on the borrower.