Shariah provisions regarding possession of currency note in Bayʿ al-Sarf in modern Islamic financial institutions

معاصر اسلامی مالیاتی اداروں میں عقد صرف میں کرنسی نوٹ پر قبضہ کے احکام

Abstract

The contract of Sarf is actually the exchange of money for money and trading in currencies is one of its modern applications. There are some special rules and regulations set by shariah for this type of sale. These conditions include spot payment by both parties and if counter values are of the same currency they must be of equal amount. After the invention of modern currencies of different countries, shariah rulings related to some contemporary applications and different situations arose from trading and exchange of these currencies, need to be examined and analyzed. The aim of this study is to examine and analyze shariah status of currency note and the contemporary applications with special concentration on taking possession of the counter values in bay e Sarf. The method used in this paper for the research was descriptive and analytical .This article proceeds with an introduction, concept and conditions of Sarf contract as envisaged by classical fiqh literature. The second part discusses the nature of bank note, difference between currencies of different countries and the forms of actual and constructive possession acceptable by shariah in modern banking system. Moreover shariah ruling about future and forward sale of currencies will also be discussed. The last part explains the findings of this discussion on the topic. The study found that the exchange of bank notes comes under Bay e Sarf and all the relevant shariah rulings would be applied to it. Moreover, receiving a cheque does not fulfill the condition of possession of Sarf Sale.