What is the ruling on buying gold with certified checks from the bank, and is it considered hand-to-hand?

The questioner : The ruling on buying gold with certified checks from the bank, and whether it is hand-to-hand, especially in the case of some shops that buy tens or hundreds of kilograms of gold, making it difficult and burdensome for them to pay in cash?

The Shaykh : Yes, by Allah, this is one of the thorny issues in this age; because it appears that it is not permissible, and this method of buying, I think, was the cause of the bankruptcy of many people in some incidents years ago, because he bought and then sold, and the one who bought sold, and so on, until a blow struck the last buyer, for example, and he went bankrupt; so it must be hand-to-hand, and the goods must be transferred as is known in the Sunnah.

The questioner : But may Allah reward you, in the case they use, the people of gold or others, that the buyer takes this check and goes with it to the bank, and the bank signs on the check that he has a balance, right? Then if he gives it to the bank, would this check be in the position of the dinar that you pay, because the bank guarantees that it will deliver to you, meaning on the guarantee of this check that has been signed?

The Shaykh : First, if we return to the dealing with the bank itself, is it lawful? Is depositing money as a balance, as our brother says, so that he can buy in this way, is it a lawful method? Of course, the answer is no, is it not?

The questioner : I did not imagine it that way; because your intention is that the buyer deposits his money in the bank, in a form that is lawful, if Allah wills.

The Shaykh : I mean, is it permissible? And how would it be lawful, in what form?

The questioner : I do not know, they say that Al-Rajhi Bank, which is here with us in Saudi Arabia...

The Shaykh : No, do not be deceived by names; we now want to know the form so that we can benefit from it, because we also have an Islamic bank here, meaning an Islamic bank with a name more prominent than Al-Rajhi; but what concerns us is the form, how is it possible?

The questioner : The form, I mean, I am actually just being told about it; and in reality, I have not dealt with this myself.

The Shaykh : Praise be to Allah, praise be to Allah, and the safest thing is that you do not find it.

The questioner : We do not want to assume that it is a lawful deposit, right?

The Shaykh : I do not think this exists; every money deposited in the bank is dealt with by the bank in an unlawful manner, and here comes the hadith that we heard...The questioner : ...just now So everyone who deposits his money in the bank under the claim that I do not take riba, and they call it by another name, saying I do not take interest; if he is truthful that he does not take interest; but he feeds interest, then it is not permissible; I do not think depositing money in a riba-based bank is a lawful deposit, no matter what you present or change the form; in any case, we do not stop here with the answer, but I say number one, this is the first answer: "What is built upon a defective foundation is defective." Suppose the matter is as you were told, that it is a lawful deposit, well, did he receive the goods?

The questioner : The buyer?

The Shaykh : Yes, the buyer.

The questioner : Yes, on the condition that he gives me the check and receives the gold.

The Shaykh : And where?

The questioner : In the same place.

The Shaykh : In the same place, ah; well, when does the owner of the gold receive the value of the check?

The questioner : He can contact the bank and say transfer it in my name, and he can go himself, meaning he goes immediately to the bank and transfers it in his name.

The Shaykh : Well, if he goes immediately, the form is permissible, but if he does not go immediately, the case remains problematic and there is a second issue besides the first issue; because these people who deal with the bank, the bank says, for example, as I think, and I am like you, I do not know, and praise be to Allah, I have not been afflicted with this general affliction; the gold seller goes and says record the value in my account; is it not so?

Another questioner : Record the value?

The Shaykh : He records the value of the gold that the buyer bought, he puts it in his current account in the bank, it is the merchant who responds, meaning because it is his job.
Abu Layla : Yes, transfer from such-and-such account to my account.

The Shaykh : That is it.
Abu Layla : So it goes out from this person's account to the account of the merchant who sold the goods, meaning for example, I sell you goods, you tell me take this check, I want the check on the bank, so it moves from your account to my account?

Another questioner : I received my money.
Abu Layla : The Shaykh : It has a second purpose, but by the bank's method.

The Shaykh : But his presence in person resolves the issue.

Another questioner : And the telephone?

The Shaykh : By telephone, he did not receive it.
Abu Layla : The transaction does not proceed at all until he gives the check...

The questioner : ... .
Abu Layla : Of course, our Shaykh, this certified check is considered by the big merchants, because in huge amounts that some merchants buy, that this check is final, considering that if it was signed for a person, it becomes immediately non-returnable; sometimes the balance is not complete, but this is not certified, meaning your full balance, and he cannot withdraw any amount from that account reserved for the merchant who bought it, except that this check is out... until what, our Shaykh? Until this merchant does not scheme to buy from someone with a certified check and go withdraw the money—yes.

The Shaykh : Yes, and this happens.
Abu Layla : It happens, our Shaykh, but by the help of our Shaykh? The same bank employees, they have percentages and such, we have a bank in Zarqa, the Kuwaiti bank.

The Shaykh: All right.