Arabic (ربا الحديث) for riba identified in the hadith of Prophet; it is also known as riba al-fadhl, i.e., riba of surplus/ riba of excess. Riba al-hadtih is a type of riba that exists in, or results from, a sale transaction (ba’i or bay’) whose underlying is a ribawi item. It comes into existence in a sale transaction that involves the exchange of one ribawi commodity/ ribawi item (such as dates, wheat, etc) for the same type of commodity but different amount or weight. For example, the exchange of 10 kg of excellent-quality dates for 20 kg of poor quality dates. In simple terms, riba al-hadith arises from the exchange between two items of the same type, but in unequal amounts, whether in terms of quality like for like (mithlan bi mithl – مثلاً بمثل) or hand to hand (sawa’an bi swa’a – سواء بسواء) or in terms of delivery time (spot or yadan bi yad).

The addition on one side of the transaction is in physical quantity rather than in value, and whether that extra addition is initially stipulated in the contract or not.