The Book of Musaqah - Sahih Muslim 1596 b

Usama b. Zaid reported Allah's Apostle (ﷺ) as saying: There can be an element of interest in credit (when the payment is not equal).

Commentary on the Prohibition of Riba in Credit Transactions

This hadith establishes a fundamental principle in Islamic finance regarding the prohibition of riba (usury/interest). The Prophet Muhammad (ﷺ) clarifies that even in deferred payment transactions, if there is inequality in the exchange of the same commodity, it constitutes riba al-nasi'ah (interest in delay).

Scholars explain that when the same type of goods are exchanged with deferred payment and there is disparity in quantity or quality, this falls under the category of prohibited interest. For example, selling one kilogram of high-quality dates for 1.5 kilograms of the same dates to be paid later would be prohibited, as it involves both delay and inequality.

Legal Implications and Contemporary Application

This ruling applies particularly to the six commodities mentioned in other hadiths: gold, silver, wheat, barley, dates, and salt. When these are exchanged against their own kind, they must be equal in measure and immediate in payment. If payment is deferred, any inequality makes the transaction unlawful.

In modern contexts, this principle extends to currency exchange and financial transactions. Scholars have determined that paper currency falls under the rules of gold and silver, meaning that exchanging different currencies with deferred payment where there is inequality constitutes riba. This understanding forms the basis for Islamic banking's requirement for spot transactions in currency exchange.