Pledging Gold
Machine translationRead the Arabic original
Praise be to Allah alone, and blessings and peace be upon the one after whom there is no prophet. Having reviewed the matter sent to His Eminence the Grand Mufti from the esteemed Shaykh: Bandar ibn Abd al-Rahman al-Falih , the judge at the Diwan al-Mazalim in the Eastern Province, and referred to the Committee by the General Secretariat of the Council of Senior Scholars with number (7108) and date 8/7/1423 AH, the Permanent Committee for Scholarly Research and Ifta has examined the question posed by the inquirer, the text of which is as follows: Recently, and on a large scale, gold shops in the city of Dammam and its surroundings have advertised their practice of pledging gold. When asked about the nature of this transaction, they explained that they enter into an agreement with the customer whereby
An agreement with the customer that they purchase gold from him for a specific amount (for example, ten thousand riyals) and then he keeps it with them for a specific period agreed upon in advance (for example, one or two months). If he returns within the agreed period, they sell him the same gold for more than the price they bought it for (for example, twelve thousand riyals), knowing that the advertisement for this transaction has spread even in the newspapers, and some shop owners have started announcing in front of their shops that they engage in the Shari'ah-compliant pledge of gold, and they justify their transaction as a lawful sale and purchase involving the exchange of the price and the item. What is the Shari'ah ruling on this transaction, with details? May Allah reward you with the best reward for us and for the Muslims.
After studying the inquiry, the Committee responded that the transaction in question is not permissible; because its reality is the sale of cash for more cash with a deferred payment, and in that lies the combining of riba al-fadl (usury of excess in a like-for-like exchange) and riba al-nasi'ah (usury of deferment). Describing this transaction as a pledge is an incorrect description; because the reality of a pledge is securing a debt with an item that is permissible to sell in the Sharia, so that the debt is recovered from the pledge or from its price if recovering the debt from the debtor is difficult, and this is not present in the transaction in question. Rather, it is a type of the forbidden stratagems, about which the Messenger of Allah (peace and blessings be upon him) said: narrated by Ibn Batta, and its chain of narration was verified by Ibn Kathir in his (Tafsir).
An agreement with the customer that they purchase gold from him for a specific amount (for example, ten thousand riyals) and then he keeps it with them for a specific period agreed upon in advance (for example, one or two months). If he returns within the agreed period, they sell him the same gold for more than the price they bought it for (for example, twelve thousand riyals), knowing that the advertisement for this transaction has spread even in the newspapers, and some shop owners have started announcing in front of their shops that they engage in the Shari'ah-compliant pledge of gold, and they justify their transaction as a lawful sale and purchase involving the exchange of the price and the item. What is the Shari'ah ruling on this transaction, with details? May Allah reward you with the best reward for us and for the Muslims.
After studying the inquiry, the Committee responded that the transaction in question is not permissible; because its reality is the sale of cash for more cash with a deferred payment, and in that lies the combining of riba al-fadl (usury of excess in a like-for-like exchange) and riba al-nasi'ah (usury of deferment). Describing this transaction as a pledge is an incorrect description; because the reality of a pledge is securing a debt with an item that is permissible to sell in the Sharia, so that the debt is recovered from the pledge or from its price if recovering the debt from the debtor is difficult, and this is not present in the transaction in question. Rather, it is a type of the forbidden stratagems, about which the Messenger of Allah (peace and blessings be upon him) said:
Do not do what the Jews did, so that you make lawful the prohibitions of Allah by the slightest of ruses
لا ترتكبوا ما ارتكبت اليهود فتستحلوا محارم الله بأدنى الحيل
Source
www.alifta.gov.sa
The Arabic text is copied verbatim from the original source, without any edits.