---
title: "What is Riba al-fadl? | IslamicOpenFinance™"
description: "Riba of excess: an unequal exchange of the same kind of certain goods, such as gold for a larger quantity of gold."
url: https://islamicopenfinance.com/glossary/riba-al-fadl/
lang: en-GB
source: "IslamicOpenFinance"
---

[Glossary](https://islamicopenfinance.com/glossary/) / [Shariah fundamentals](https://islamicopenfinance.com/glossary/#fundamentals)

Shariah fundamentals

# Riba al-fadl

Riba of excess: an unequal exchange of the same kind of certain goods, such as gold for a larger quantity of gold.

Riba al-fadl arises in exchange rather than lending, and IFSB-24 refers to it as riba in an exchange contract. It occurs when certain items of the same kind, classically gold, silver and staple foodstuffs such as wheat, barley, dates and salt, are exchanged in unequal quantities. The rules on these ribawi items are the basis for how Islamic finance treats currency exchange, which must be on the spot and, for the same currency, at par.

## Sources

- [IFSB-24 Guiding Principles for Investor Protection in Islamic Capital Markets, 2020: prohibition of interest: riba al-fadl](https://www.ifsb.org/wp-content/uploads/2023/10/IFSB-24_En.pdf)

This entry explains a term; it is not a Shariah ruling. Approving a product is for each institution's own Shariah board and regulator.

## Related terms

[**Riba** An increase over principal that Shariah prohibits: extra stipulated on a loan, or an unequal exchange of certain like-for-like goods.](https://islamicopenfinance.com/glossary/riba/) [**Riba al-nasiah** Riba of deferment: an increase stipulated in return for extra time, most commonly on a loan.](https://islamicopenfinance.com/glossary/riba-al-nasiah/) [**Bay al-sarf (currency exchange)** An exchange of money for money, of the same or a different currency, which must be settled on the spot.](https://islamicopenfinance.com/glossary/bay-al-sarf/) [**Islamic FX forward** A currency hedge built on a binding promise to exchange at an agreed rate on a future date, with the exchange itself done at spot.](https://islamicopenfinance.com/glossary/islamic-fx-forward/)

**Shariah fundamentals**

1. [Riba](https://islamicopenfinance.com/glossary/riba/)
2. [Gharar](https://islamicopenfinance.com/glossary/gharar/)
3. [Maysir](https://islamicopenfinance.com/glossary/maysir/)
4. [Shariah](https://islamicopenfinance.com/glossary/shariah/)
5. [Fiqh al-muamalat](https://islamicopenfinance.com/glossary/fiqh-al-muamalat/)
6. [Maqasid al-Shariah](https://islamicopenfinance.com/glossary/maqasid-al-shariah/)
7. [Riba al-nasiah](https://islamicopenfinance.com/glossary/riba-al-nasiah/)
8. [Al-ghunm bil-ghurm](https://islamicopenfinance.com/glossary/al-ghunm-bil-ghurm/)

[All 221 terms](https://islamicopenfinance.com/glossary/)