The Application of Riba to Paper Currency
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Fatwa No. ( 3291 )
Q: Does riba (usury or interest) occur in the small coins and the Turkish lira, which is stamped with specific images and made from paper and copper, as well as the Saudi Riyal , which is also made from paper and copper, or not?
As stated in all legal books, and there is no riba in the fulus, as the Imam al-Shafi'i said in his book (Al-Umm): ( And the fulus are not a price for consumable items; because there is no zakah in them, and they are among those in which there is no riba ).
A : And it answered as follows: The Council of Senior Scholars has previously studied the issue of paper currency and issued a decision by majority, which stated: First: Riba applies to it in both its types, just as riba applies in both types to the two currencies of gold and silver, and to other currencies, such as the fulus. This necessitates the following: a- It is not permissible to sell some of it for some of it, or for other currencies of gold or silver or otherwise, on credit in any case. So, for example, it is not permissible to sell the US dollar for five Saudi Riyals, or less, or more, on credit. b- It is not permissible to sell some of the same type for some of it with a difference in amount, whether that is on credit or hand-to-hand. So, for example, it is not permissible to sell ten paper Saudi Riyals for eleven paper Saudi Riyals. c- It is permissible to sell some of it for some of it of a different type, absolutely, if that is hand-to-hand. It is permissible to sell the Syrian or Lebanese Lira for a paper Saudi Riyal, or silver, or less than that, or more, and to sell the US dollar for three Saudi Riyals, or less, or more; if that is hand-to-
hand, and similarly permissible is selling the silver Saudi Riyal for three paper Saudi Riyals, or less, or more, hand-to-hand; because that is considered selling one type for a different type, and there is no effect to mere sharing of a name with a difference in reality. Second: The obligation of its zakah if its value reaches the minimum of the two nisabs of gold or silver, or if it completes the nisab with other currencies and goods prepared for trade, if it is owned by those upon whom it is obligatory. Third: The permissibility of making it capital in salam and partnerships. And success is from Allah, and may Allah send prayers and blessings upon our Prophet Muhammad, his family, and his Companions.
Q: Does riba (usury or interest) occur in the small coins and the Turkish lira, which is stamped with specific images and made from paper and copper, as well as the Saudi Riyal , which is also made from paper and copper, or not?
As stated in all legal books, and there is no riba in the fulus, as the Imam al-Shafi'i said in his book (Al-Umm): ( And the fulus are not a price for consumable items; because there is no zakah in them, and they are among those in which there is no riba ).
A : And it answered as follows: The Council of Senior Scholars has previously studied the issue of paper currency and issued a decision by majority, which stated: First: Riba applies to it in both its types, just as riba applies in both types to the two currencies of gold and silver, and to other currencies, such as the fulus. This necessitates the following: a- It is not permissible to sell some of it for some of it, or for other currencies of gold or silver or otherwise, on credit in any case. So, for example, it is not permissible to sell the US dollar for five Saudi Riyals, or less, or more, on credit. b- It is not permissible to sell some of the same type for some of it with a difference in amount, whether that is on credit or hand-to-hand. So, for example, it is not permissible to sell ten paper Saudi Riyals for eleven paper Saudi Riyals. c- It is permissible to sell some of it for some of it of a different type, absolutely, if that is hand-to-hand. It is permissible to sell the Syrian or Lebanese Lira for a paper Saudi Riyal, or silver, or less than that, or more, and to sell the US dollar for three Saudi Riyals, or less, or more; if that is hand-to-
hand, and similarly permissible is selling the silver Saudi Riyal for three paper Saudi Riyals, or less, or more, hand-to-hand; because that is considered selling one type for a different type, and there is no effect to mere sharing of a name with a difference in reality. Second: The obligation of its zakah if its value reaches the minimum of the two nisabs of gold or silver, or if it completes the nisab with other currencies and goods prepared for trade, if it is owned by those upon whom it is obligatory. Third: The permissibility of making it capital in salam and partnerships. And success is from Allah, and may Allah send prayers and blessings upon our Prophet Muhammad, his family, and his Companions.
Source
www.alifta.gov.sa
The Arabic text is copied verbatim from the original source, without any edits.