#TL;DR : Risk Sharing In Islam

Islam does not prohibit all commercial business or all loans. Instead, it encourages legitimate commerce and trade activities, undertaken on the basis of ‘equitable risk sharing.’ Equitable risk sharing means, that both parties share in the reward, or the failure, of the investment, thereby encouraging more responsible lending practices. 

However, the ‘unjust’ loans provided to conventional banks, or any conventional financial institutions were not given on this basis. Therefore there was no reason for the bank to ensure that the loans were invested wisely and productively, or that the borrowers would be able to pay them back.

In Islam, the responsible loans (or known as a profit) such as those that are used to finance economic activities are permitted. However, it is the obligation of the lender to provide loans in a responsible manner and also in a manner that does not overburden the borrower. Yet, the ‘unjust’ loans given by some conventional financial institutions failed this criteria.

They were irresponsible because they only know about their own benefit from those clients. And they were over-burdening them with the high rates of interest and that will not do good among both parties.