Shariah Analysis of Contemporary Applications of Bayʿ al-Sarf in Islamic Financial Institutions

اسلامی مالیاتی اداروں میں بیع صرف کی معاصر تطبیقات کا شرعی جائزہ

Abstract

Trading in currencies is a type of permissible sale contracts. Its legitimacy is proved by Quran and Sunnah. There are some special rules and regulations set by shariah for this type of sale, like taking possession on spot and if counter values are of the same currency they must be  of equal amount. However the contemporary applications of this contract, especially in Islamic financial institutions, need to be investigated to come up with solutions faced by these institutions. The purpose of this research article is to explain the shariah ruling related to trading in currencies by discussing the modern practices being applied by Islamic financial institutions. This article proceeds with an introduction of Surf contract. The second part will discuss the contemporary applications in modern Islamic financial institutions. This discussion includes the legitimacy of agency in trading of currencies, use of modern means of communication for currency trading, bilateral promise to purchase and sell currencies, exchange of currencies that are debt owed by the parties, combination of currency exchange and transfer of money and some forms of dealing in currencies through institutions. The last part explains the findings of this discussion on the topic.