[On Ribā and Its Types]

The answer: Allah Most High has forbidden ribā because of the injustice it entails. He said, concerning the usury-takers: “…then you may have your principal—you do no wrong, nor are you wronged.” [Al-Baqarah :279]. Allah Most High willed that dealings between the two parties be upon justice—so that there is not one oppressing and the other oppressed.
Ribā is of types:
1- Ribā al-nasī’ah (ribā of debt). The people of the Age of Ignorance used to transact on credit, and the debt would increase as days passed—exactly as is the case now in banks. The injustice in this type is manifest.
2- Selling gold for gold with disparity, such as selling ten grams for fifteen; likewise silver for silver, wheat for wheat, barley for barley, raisins for raisins, dates for dates, and corn for corn—permissibility requires equality of the two counter-values, and this is only lawful hand to hand.
— Selling wheat for its like, wheat for wheat, on credit is ribā; it is not permissible due to the hadith: “Like for like, hand to hand; whoever increases or seeks increase has engaged in ribā.” As for borrowing any one of these items, that is permissible.
The specific reason (ʿillah) for the prohibition of selling gold for its like—gold for gold—on credit is not clear; likewise for the other listed categories, the cause is not evident, but Allah Most High is All-Wise.
We may say: by comparing the permissibility of borrowing an amount of gold and then returning its like, with the prohibition of purchasing that same amount on credit and then returning its like, a part of the wisdom may become apparent. By comparing the two cases, one can discern the difference between them; once the difference is known, it must factor into the prohibition. The two are equal in most respects and incidental matters, but they differ in:
1. The name: one is called a loan (qarḍ) and the other a sale (bayʿ).
2. In a sale, each party is not a benefactor, nor is he described as one—inasmuch as it is a sale.
3. In a loan, however, the lender is a benefactor, described as bestowing kindness upon the borrower, deserving the borrower’s thanks and a reward from Allah.
These are the differences between the two. It is known that mere naming has no role in legislation. Thus, the reason for the prohibition of sale in that case may be that one of the parties is wronged—namely, the seller. This is clear, for he gives what is in his hand—say, gold—to the other party; once it leaves his hand he is deprived of benefiting from it until the other party repays it, and he has no benefit in that: he merits neither the purchaser’s thanks nor Allah’s reward. All he receives is deprivation of benefitting from what he gave for a period of time.
This is unlike a loan, for the lender deserves multiplied reward from Allah, along with the recipient’s thanks.
That from one angle. From another, we may say: the objective of sale, qua sale, is seeking profit, and that is not present in this sale.
3- Selling a commodity for more than its price on account of credit; this type is attached to the first.
Source: Min Thimār al-ʿIlm wa al-Ḥikmah vol.2