If you give one of them riyals to give to another in a different country in that country's currency, does this fall under riba al-fadl (usury of excess in a like-for-like exchange)?
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The Shaykh : Yes?
The questioner : May Allah reward you. Regarding the hawalah (transfer of debt), Shaykh, if a man gives another man an amount so that the other man can receive it in another town in that town's currency, and the difference in currency between the riyals poses a problem for him, Shaykh, does this fall under riba al-fadl (usury of excess in a like-for-like exchange), or is there no harm in it, Shaykh?
The Shaykh : This falls under riba al-nasi'ah (usury of deferment), because with a difference in currency, there is no riba al-fadl (usury of excess in a like-for-like exchange), but riba al-nasi'ah (usury of deferment) is involved. Therefore, the correct hawalah (transfer of debt) is on one of two ways:
Either he transfers it in dirhams to the other place, and then the exchange takes place there at the current price, or he buys the currency of the second country in the first country and transfers it to the second country in the second country's currency. One of these two things. As for what you mentioned, this is an exchange without possession, and an exchange without possession is not permissible.
The questioner : May Allah reward you. Regarding the hawalah (transfer of debt), Shaykh, if a man gives another man an amount so that the other man can receive it in another town in that town's currency, and the difference in currency between the riyals poses a problem for him, Shaykh, does this fall under riba al-fadl (usury of excess in a like-for-like exchange), or is there no harm in it, Shaykh?
The Shaykh : This falls under riba al-nasi'ah (usury of deferment), because with a difference in currency, there is no riba al-fadl (usury of excess in a like-for-like exchange), but riba al-nasi'ah (usury of deferment) is involved. Therefore, the correct hawalah (transfer of debt) is on one of two ways:
Either he transfers it in dirhams to the other place, and then the exchange takes place there at the current price, or he buys the currency of the second country in the first country and transfers it to the second country in the second country's currency. One of these two things. As for what you mentioned, this is an exchange without possession, and an exchange without possession is not permissible.