Modern Banking, Credit and Riba

A modern credit arrangement must be analysed by its actual contractual structure, not merely by its commercial name. Identify whether the transaction is a loan, sale, lease, partnership or agency arrangement; then determine who owns the asset, who bears risk and whether an increase is stipulated on a debt because of time. In Hanafi fiqh, the prohibition of riba is central, but a ruling on a particular banking product requires its full terms. Compare a genuine deferred-price sale with a cash loan carrying interest, and examine late-payment penalties, fees and disguised financing separately.