As salam u allaiqum
Islam condemns riba because the adverse effects of riba/interest are manifold and it is totally against the Islamic principles. Islam is a religion of peace, justice, social welfare and high moral principles. Hence, it prohibits those practices which are detrimental to human beings and to the society, by and large. Although interest is playing a large role in the modern economic systems, yet Islam prohibits interest as it is not in the interest of humanity!
Islam is a way of life and it covers all aspects of life, be it social, economic, political or spiritual. Islam was the first religion which had established social and economic justice during the era of al-Khilafah-al-Rashidah.
Islam strictly prohibits exploitation and unjustified enrichment. Socio-economic justice can be achieved through equal distribution of wealth in the society. In order to fulfill its goal of achieving socio-economic welfare and justice to all, Islam has prohibited riba. The practice of charging riba/interest from a needy person, who borrows money to make both ends meet, is considered to be exploitative according to Islam. However, the mindset of the western world is different.
As far as the western economies are concerned the picture is quite different as interest forms an inseparable part. Interestingly, the practice of lending money for interest has been detested by all the monotheistic religions of the world. According to Roy Harrod, a prominent western economist, elimination of interest is the only way by which the breakdown of capitalism can be prevented.
In my next post I shall discuss about the Quranic verses which prohibit riba. Inshallah the discussion will prove fruitful and it will establish the fact that there are some solid reasons why riba (and all the practices associated with it- such as insurance, credit cards etc) are un-Islamic.