Q: We hope that the Grand Sheikh shows us how the validity of this transaction:
1. The Islamic Bank determines the currency in which wants to buy it through the TV screens that are linked to the currency market in different countries such as New York, London and Tokyo … (Assume that the currency set by the Bank is the U.S. dollar).
2. Suppose that the Islamic bank wanted to buy the U.S. dollar from “Lloyds Bank” in Britain, in which case it is imperative for the Islamic Bank to sell in another currency(Assume German Mark) Suppose that the U.S. dollar = 3 German Franks .. In this case, the Islamic Bank for example, buy a million dollars in exchange for selling 3 million mark for the British bank.
3.After selection of the currency purchased and the currency sold by the Islamic Bank and Bank of England, the Islamic Bank select it’s bank correspondent in America, suppose that “Bank of America,” to allow a British bank tto wired to it’s bank correspondent in the United States to pay the said amount, one million dollars for the Islamic Bank. The same process carried out by the Bank of England is the selection of it’s bank correspondent in Germany, suppose that “the Frankfurt bank,” so that the Islamic bank wired to it’s bank correspondent in Germany to pay the said amount of 3 million marks for the Bank of England.
4. After the selection of the currency purchased and sold and determined the correspondent banks, the process of delivery and receipt of the amounts agreed upon and deposited in each of the banks’ accounts. In fact, the issue of delivery and receipt are not at the same moment, but is within 48 working hours that is internationally recognized, and is called spot sales or present, and sometimes if transaction encounter a weekend then the delivery and receipt will occur within 96 working hours
In other words, if the deal between the Islamic Bank and Bank of England at occurred at ten in the morning on Monday 12/01/1987, the handover is in two days from the date in a maximum period of Wednesday 12/03/1987 at ten o’clock in the morning, unless coincided with the weekend which “Saturday and Sunday”, then the delivery and receipt is within four working days which is 96 working hours.
It is worth mentioning that the handover may be in the same moment may be after an hour or two, may be after 40 hours so as not to exceed in any case 48 hours, because after that the sale is deferred and is not present according to international norms to do so.
Kindly clarify the shaia’a law regarding that .
A: In the name of God, praise God, prayer and peace upon the Messenger of Allah, and after:
Brother, for when you asked me in what your message is about the investment of some Islamic banks in the sale and purchase of foreign currencies, I answer you briefly, and hopefully you will have enough explanation on this matter:
The legitimate origin in the sale and purchase of money to each other: to be hand in hand, and if so to speak, from the Messenger of Allah – peace be upon him – in the sale of the six species known to each other.
Hence, the delay or differ is not valid in contracts for the sale of money, but you should be in the same sitting of the Council, as in the hadeeth of Ibn Omar: “It is that to dismiss the sale without leaving anything behind.”
However, the payment is subject to custom, and catch everything to another. And Sharia’s “Law” have left to many of the things for people know to identify, as mentioned by Imam Ibn Qudaamah and others, including the payment in the sale.
So long as the payment is immediate as of the norms and custom & is happening only with the method that you have mentioned, and separated from differed selling, then the legitimate payment becomes verified by Sharia’a, and are ranked by the provisions of Islamic law .. While verifying the payment depending on the need for modernism, the necessity should not be exaggerated, but is not permissible for the Islamic Bank to sell what was bought only after the actual payment of customary law was deposited in the Islamic Bank’s account.
And Allah knows best.
Original Transcript: Islamonline