 In this module and the next two modules, we would be looking into some very fundamental concepts in Islamic banking and finance. The first fundamental concept is Riba, which is known as Sood in Urdu and Interest in conventional framework or in English language. The concept of Riba is extremely important and we have to look at it from an Islamic juristic viewpoint. The question arises, what is meant by Riba and what is actually prohibited when we talk about Riba? Riba is a very simple concept, although a lot of people would suggest otherwise. Especially in Pakistan, there are many people who think that Riba or Interest is misunderstood by people. But in this module, I will tell you that probably this is one of the simplest concepts that the Quran has stated among a number of other things. In its very simple form, if two parties exchange something in unequal quantities, it gives rise to Riba. So this is the simplest definition of Riba. I will also tell you in Urdu that when two parties exchange something in unequal quantities, and in return, the second person is giving different quantities, then we will call this transaction a Ribwi transaction or we will say that this is called Sood. And what would be the quantity of Sood? The quantity of Sood would be the difference of two quantities. So if one person gives 100 rupees to another person, and in exchange, the other person gives 110 rupees to the other person, this means there is a difference of 10 rupees in this transaction. These 10 rupees would be considered as interest or Riba, and this interest is actually prohibited. And of course, it applies to money as well. So whenever there is exchange of unequal amounts of money in any transaction, that would give rise to Riba, and this is the Quranic concept of Riba which is prohibited. So if we keep in mind this definition of Riba, it would become very clear that the interest which is charged by conventional banks or for that matter by anyone that is actually prohibited by the Quran. Now we have to see what is actually prohibited in this Ribwi prohibition. We said that Riba is unequal exchange of anything. If someone gives 100 rupees to someone else and demands 110 rupees back, this demands is very important. If the person demands more than what the person has given to someone, this would be considered as prohibited interest, Riba or Sud. So any institution, any individual, if they ask for more than what they have given to someone else, that would be considered as Riba. So the most important thing in the concept of Riba is that the person who has given more than what the person has given to someone else, this would not be Riba. So if someone gives 110 rupees instead of 100 rupees, this is actually a charity and this is Sunnah. So the most important thing in the concept of Riba is that this is actually inequality of amounts in exchange and there is a compulsion in it i.e. one party compels the other party to pay back more. If that is the case, that would be considered as Riba which is prohibited in Islam.