RIBA

there are hadith of Prophet Muhammad SAW where:

'Gold for Gold, Silver for Silver, Wheat for Wheat, Barley for Barley, Dates for Dates, Salt for Salt, should be exchanged like for like, equal for equal, and hand to hand. If the types of the commodity is different, then sell them as you wish, if they are exchanged on the basis of a hand-to-hand transaction' 

 and the Prophet Muhammad SAW cursed the receiver and the receiver of interest, the one who records it and the witness to the transaction and said:

'They are all alike(in guilt)' (Muslim)

DEFINITION

Literally-excess

Shariah- addition, however slight, over and above the principal of loan or debt that resulting from i)the delay of counter value in an exchange based on loans or and ii)the quality premium in the exchange of low quality for quality goods of the same genus

Broader definition- means and includes any increase over and above principal amount payable in a obligation,not covered by corresponding increase in labor, commodity, risk or expertise

TYPES OF RIBA

Debt( Al-Nasiah) 

-from the word of nasa'a - to postpone, defer or wait
-refer time that is allowed for the debtor to repay the loan after its due date
-therefore, the debtor have to pay an extra amount or called as premium on the extended paying period
-that extra amount = riba

hadith related- by Usama Ibn Zaid- 'there is no riba except in nasiah'

Sales(Al-Fadl)

-occurs as a result of trade or sale transactions
-covers all on-the-spot transactions involving cash payment and immediate delivery of goods
-the prohibition is based on 'Gold for Gold, Silver for Silver .....'
-happens when the ribawi materials exchanged are different weight and measurement
-happens when payment of the price and delivery of the ribawi materials are made at two different times and not immediate

Pre-Islamic(Jahilliyah)

-is a transaction whereby a person would sell something for a payment to be made at a specified future time. Then when the time at payment came, and the buyer did not have all the necessary amount, the seller would increase the amount due and give him more time

-it contains riba al-nasiah  riba al-fadl. In this transaction, the payment is delayed(nasiah) in exchange for an increase(fadl)

-modern examples are loans from the banks and credit card