The Difference Between Hawalah and Currency Exchange in Banks
Machine translationRead the Arabic original
Question:
Honorable Shaykh, what is the difference between hawalah and currency exchange in banks between countries and states?
Answer:
If hawalah means sending the money itself via a person or an institution, where it is sent from one country and delivered to another country as the same money, that is hawalah. This is a type of transaction; it is not a debt. It is something that moves from one country to another, and it falls under the ruling of hawalah. However, if the one who is transferring intends to exchange it from one currency to another—for example, you want to transfer Saudi riyals and have them exchanged in the second country into US dollars or British pounds—that is currency exchange. If the money is to be exchanged from one currency to another, that is currency exchange, and it is not permissible except hand-to-hand. But if the money is transferred as itself and delivered as itself, then there is no harm in that. Yes.
Honorable Shaykh, what is the difference between hawalah and currency exchange in banks between countries and states?
Answer:
If hawalah means sending the money itself via a person or an institution, where it is sent from one country and delivered to another country as the same money, that is hawalah. This is a type of transaction; it is not a debt. It is something that moves from one country to another, and it falls under the ruling of hawalah. However, if the one who is transferring intends to exchange it from one currency to another—for example, you want to transfer Saudi riyals and have them exchanged in the second country into US dollars or British pounds—that is currency exchange. If the money is to be exchanged from one currency to another, that is currency exchange, and it is not permissible except hand-to-hand. But if the money is transferred as itself and delivered as itself, then there is no harm in that. Yes.
Source
شرح بلوغ المرام من أدلة الأحكام [ صالح الفوزان ]، بداية من باب الصلح — islamhouse.com (1:18:32)
The Arabic text is a machine transcription of the audio recording.