A Survey of the Theory of Non Prohibition of Riba in Production Loans

In the history of Islam, Until the last century, Shiah and Sunni scholars haven’t distinguished between consumption and production loans and riba in Islam absolutely has been forbidden. With the development of capitalism and its influence in Muslim countries, many businessmen, industrialists and bankers were faced with the problem of usury . To solve this problem, a group of theologists proposal interest-free banking model and others tried to present a new interpretation of riba with distinguishing between consumption and production loans. Based on this theory, these scholars believed conventional banking don’t have any Shariah challenge, because loans that provided by conventional banks are production loans and receiving any return on these loans is not prohibited.
This paper reviews the historical background of the prohibition of riba and the reasons for it, then with reviewing and analyzing ten reasons about the prohibition of riba, we understand there is no complete reason for differentiating riba in consumption and production loans and riba absolutely is forbidden from the point of view of Islam.