What term refers to interest or usury, which is explicitly prohibited in Islamic financial transactions?

Explanation

– Riba refers to interest or usury, which is explicitly prohibited in Islamic financial transactions, as clearly stated across multiple verses within the Quran.
– This prohibition has significantly shaped the development of alternative Islamic financial instruments designed to avoid interest-based lending and borrowing structures entirely.
– For exams, remember that Gharar refers separately to excessive uncertainty or ambiguity in a contract, which is also generally prohibited in Islamic transactions.