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All Praise be to Almighty Allah.
Blessing and peace be on His Prophet Muhammad
after whom there is no prophet, and on all those
who followed his way of guidance.
The Islamic Fiqh Council during its 5th session held between 8-16 Rabi Al-Aakhir 1402H (2-10 February 1982) looked into the research paper presented to it on the issue of the currency note and the rulings of Islamic Shari’ah on it. After having discussion and deliberation, the Council adopted the following resolution:
1. Since the origin of cash money is gold and silver, and their pricing is the main cause of usury according to one of the most authentic views in the Islamic Fiqh. This pricing is not confined to gold and silver only and since the currency note has also acquired the price value and taken the place of gold and silver in the transaction and through it, things are evaluated in the present age, because the dealing with gold and silver has disappeared. People are now content to possess and save it. The public commitments and dealings are finalized through it, despite the fact that it has no value in its own. Its value is due to some other reason and that is the existence of general trust that it enjoys as a medium of dealing and transaction. This is its price-value.
Since the usury in gold and silver is due to the price-value that exists in the currency note, that is why the Islamic Fiqh Council decides that the currency note is self-sufficient money and its price-value is similar to that of gold and silver. Hence, Zakah is applicable in it and usury of both kinds (Fadhl and Nassa) is also applicable in it, as they are applicable in gold and silver, where the price-value plays an important role as it plays in the currency note. This way the currency note acquires the position of money in all commitments approved by the Islamic Shari’ah.
2. The currency note is self-sufficient money, and its money value is similar to that of gold and silver. The currency note has different types, which vary as per the agencies which issue them in the different countries. In other words, the Saudi currency note is one kind and the US currency note is another kind. Likewise, every currency note is a separate kind whereas the usury with its both kinds (Fadhl and Nassa) is applicable as it is applicable in gold, silver and other kinds of money.
All above considerations call for the following:
A: It is not lawful to sell the paper money for each other or for other kinds of cash money such as gold and silver. Hence, it is not lawful for example to sell a Saudi Riyal in exchange of any other currency in debt and with increase and decrease.
B: It is not lawful to sell one kind of the currency note between each other in increase or decrease whether it is in debt or cash sale, such as selling the notes of 10 Saudi Riyal for notes of 11 Saudi Riyal whether in cash or credit.
C: It is lawful to sell one kind of the currency note for another kind if it is in cash. For example, it is lawful to sell the Syrian or Lebanese Lira for Saudi Riyal or to sell one US Dollar for three Saudi Riyals if it is in cash, because this sale would be considered as a sale of one kind for different kind.
3. Zakah is obligatory in the currency notes when they reach the least of any Nisab of either gold or silver, or they make up the Nisab with other wealth or goods made for commerce or trade.
4. It is lawful to make the currency notes as the capital money in Selam sales and companies.
Chairman, Islamic Fiqh Council
Abdullah Ibn Muhammad Ibn Humaid
President, Supreme Judicial Council
Deputy Chairman, Islamic Fiqh Council
Muhammad Ali Al-Harakan
Secretary-General, Muslim World League
Abdul Aziz Ibn Abdullah Ibn Baz
General President, Research, Ifta, Da’wah and Guidance
Muhammad Mahmood Al-Sawwaf
Saleh Ibn Othaimeen
Muhammad Abdullah Al-Subaiel
Muhammad Shadhli Al-Neifer
Mustafa Ahmad Al-Zarqa
Abdul Quddoos Hashemi
Abul Hassan Ali Al-Nadwi
Abu Bakr Muhammad Joomi
Hasanain Muhammad Makhloof
Muhammad Rasheed Qabbani
Mahmood Sheith Khattab
Muhammad Salem Abdul Wadood