5. PRECIOUS METALS
Question 256 Buying Gold from Another Bank and Selling it to Clients
A bank sets aside a quantity of gold and provides us with information concerning the daily rates for its sale. We, for our part, make purchases from the bank and immediately deposit the purchase price in that bank’s account. Thereafter, we sell the gold on the basis of direct mutual receipt. What is Sharfah’s opinion of such a transaction?
Fatwa
Since the sale of gold by the bank to its clients takes place after its purchase and the deposit of its price in the seller’s account, the sale is perfectly lawful. This is because it is a sale of what is owned and possessed after mutual receipt of the two count values in both the original purchase from the other bank, and in the sale to the Islamic Bank’s clients.
Question 257 Stones Set in Gold Jewelry
What is the Shariah ruling in regard to the purchase of precious stones mounted in gold jewelry?
Fatwa
It is lawful to purchase precious stones set in gold on the condition that there be compliance, for the amount of gold present in the jewelry, with the rule for selling gold. This rule is that the price of the gold be paid immediately, so as to ensure actual possession. With regard to the jewels, however, their sale may be made on the basis of deferred payment.
Question 258 Deferred Payments for Platinum
Is it lawful to purchase platinum on deferred payments?
Fatwa
It is lawful to deal with platinum on the basis of deferred payments because platinum is not the same as gold and silver, even though it may be associated with them metaphorically. Thus, the conditions which apply to those two metals will not apply to platinum.
Question 259 Deferred Payments for Precious Metals and Stones
Will it be lawful to seil, on the basis of deferred payments, precious metals and stones other than gold and silver, like platinum, for example?
Fatwa
The sale, on the basis of deferred payment, of all precious stones and metals other than gold and silver is lawful, and there is no legal impediment to doing so.
Question 260 A Promise to Purchase Precious Metals
The custom on the international markets for precious metals is that when a trader wishes to purchase a certain metal, a certain price is set for a certain period of time, and the seller agrees to sell the metal during that period for that price. The buyer will advance a certain sum to the seller, and in return the seller will concur with the buyer that the offer for sale will remain valid for the agreed upon period of time. If the purchaser goes through with the purchase of the metals during this period, the price for the metals will be the one that was agreed upon earlier. If the period passes, however, without the purchaser buying the metal, the advance will be forfeit, and the seller will be freed of his agreement. Is such an arrangement lawful from a Sharp ah perspective?
Fatwa
What transpires in the international markets in relation to metals, including precious metals like gold and silver, is termed a sale of a non-existent, for the reason that the object for sale is not present. If The object for sale is a precious metal of the Category Of either gold or silver, a deferral may in no way become a part of the deal, neither in regard to the object for sale (i.e., delayed delivery) nor in regard to the price (i.e., deferred payment). This is because mutual receipt is essential to the completion of such a contract. If, however, the object of sale is a metal other than gold or silver, then all the conditions for a salam (future delivery) contract must be complied with, including receipt of the selling price in its entirety, and the specification of a time for delivery (of the metals). When the time comes due, the seller must deliver all of the goods, with the agreed upon specifications, to the buyer at the price specified in the contract.
If the metals for sale are physically present with the seller, and the contract is completed, it is not lawful to defer the exchange of the two counter values (the metals and their price ) so as not to become a sale of debt for debt. If what occurs between the buyer and the seller is no more than an offer by the seller of price s/he promises to honor for a certain period of time, then this may be considered a binding offer, from the perspective of the Maliki school of jurisprudence. It is lawful for the buyer to advance a sum furbun) on the understanding that when the deal is concluded the advance will be deducted from the selling price. If the deal is not concluded, the advance will be left to the seller. All of this is lawful on condition that the goods for sale, the subject of the deal, are present. It will be best for the seller, however, to keep only as much of the advance as it has cost him/her to withhold the goods from the market. All of this is in accordance with the recommendations of the Second Conference on Islamic Banking.
Question 261 Delayed Delivery of Gold or Silver
Is it lawful to buy and sell gold and silver and currency for one another if the delivery is deferred to after the deal has been closed and the parties have left the place of closing?
Fatwa
It is not lawful to buy and sell gold, silver, or currency for one another unless possession is taken right away. The buying and selling of these items on the basis of delayed delivery is one of the sorts of riba that is prohibited by the Sharp ah.
Question 262 The Nature of Gold and Silver on the Market
Are gold and silver to be dealt with as currencies or as commodities?
Fatwa
After discussing the issue, the Board decided that it still requires further study and research under the direction of the Board members themselves. Specialists in finance will likewise be invited to write on the subject. The matter has therefore been entrusted by the Board to the Secretary.
Question 263 Paying Cash for Gold
Is it lawful to pay, without delay, what one owes for gold with ready cash? How (in such a case) is mutual possession to be accomplished?
Fatwa
It is lawful to pay for borrowed gold with ready cash in any currency at the market price on the day of payment. This is considered exchange that has been owed, and in such cases it is essential that possession of the cash countervalue take place on the spot. Possession of the other countervalue (the gold) will be considered to have taken place legally because it was owed (i.e., an established liability); and the establishment of liability is the same as possession.
Question 264 Methods of Trading in Gold
Since investments in the trading of gold yield, to a great extent, the basic elements of good investing, trade in gold has become populär and profitable.
Since, moreover, the Islamic Bank does not deal in currency markets like commercial banks, this sector, or trade in gold, represents a viable alternative. Then, even though the market is subject to profit and loss, the degree of safety is high, as is liquidity, and the element of risk is negligible, owing especially to the precision of market predictions, and awareness, and the speed with which exchange transactions take place.
Gold and other precious metals have international markets and exchanges of their own, all of which are well regulated. Gold is dealt with as ore or nuggets, and then in the form of ingots, not as coinage; and all transactions take place by means of specialists. There are many ways of dealing in gold, but we are concerned with only two:
The First:
Purchase, possession, and storage when prices are low; and sale and delivery when prices rise.
The Second:
A promise to purchase and a promise to seil at the same time is known as a “currency swap”. In such a transaction, goods will be agreed upon in respect of their description in detail, their quantity, and the date of their pick up in the case of a purchase, or of their delivery in the case of a sale. When the appointed time comes, the promise is completed. What is the opinion of Your Eminence in regard to these transactions? Are they lawful, or are they unlawful? And on what evidence do you base your decision?
Fatwa
Trade in gold is lawful if the two transacting parties abide by the conditions stipulated in the Shari’ah. These conditions differ, however, with differences in the kinds of transactions. The questioner mentioned only two ways of dealing in gold, and requested a ruling in regard to each.
The First:
Purchase, receipt, and storage when prices are low, followed by sale and delivery when prices rise. This is what the question is about. It is clear, moreover, that the buyer buys the gold, receives it, and then stores it until such a time as prices rise. Thereafter, s/he will seil the gold and deliver it to a second buyer. The questioner did not mention anything about the countervalue, the purchase price. What is it to be? And will the seller receive it when the buyer receives the gold? Or will there be a delay in receipt?
It is not enough for the buyer to receive the gold. Rather, it is essential that the seller receive the price as well, at the time of the transaction’s taking place. This is because of what was related by TJbadah ibn al Samit who said that the Prophet of Allah, upon him be peace and blessings, said, “Gold for gold, silver for silver, wheat for wheat, barley for barley, dates for dates, and salt for salt, equal for equal, same for same, and hand to hand. If these categories differ, then seil however you like as long as the sale takes place hand to hand.” This narration was included in the collections of Imam Ahmad and Imam Muslim. See Muntaqa al Akhbar, with Nayl al Awtar, vol. 5, p. 204.
Then, once the buyer has received the gold and delivered its price to the seller, all at the same time, the purchase will be lawful. Thereafter, there will be nothing wrong if the buyer turns around and sells the gold s/he bought when prices rise higher, on condition that delivery of the gold and receipt of the price take place at the same time and place. And Allah knows best.
The Second:
A promise to buy and a promise to seil, both made at the same time and place, or what is commonly known as a currency swap. In such a transaction, goods will be agreed upon in respect of their description in detail, their quantity, and the date of their receipt in the case of a purchase, or of their delivery in the case of a sale. When the appointed time comes, the promise is completed.
The reply to this question depends upon knowledge of the quantity for which the promise is concluded, and the time in which delivery of both the gold and its price is to be made. None of this is clear in the question.
1. If the promise is carried out by means of both parties initiating a new contract for sale, at the pleasure of both parties when the appointed time comes, such that the buyer receives the gold and the seller receives the selling price at the same time and place, then this transaction will be sound and lawful.
2. If receipt by one of the two parties to the transaction is delayed until after the other, the transaction will be unsound, even if both parties agree. This is because the two countervalues are riba-related (forms of ribawi wealth) for which mutual exchange of possession at the time and place of the contract is an essential condition This is deduced from the hadith (of Ibadah) mentioned in the answer to the first question above.
3. If the promise is to be carried out on the basis of an earlier agreement, without a new contract being initiated, i.e., since both parties are bound to carry out the promise at the Coming of the appointed time, then this transaction will be unsound. This is because there is no difference between such a case and the sale of gold for hard currency with an understanding that delivery of the two counter values will be made at a later time. We have already explained that the sale of gold for cash is unlawful unless mutual possession (receipt and delivery) occurs at the time and place of the contract. And Allah knows best.
NOTE:
Someone might say that nowadays gold no longer retains its former status as currency, but has become the same as any other commodity, like dates or wheat. Why, then, may it not be sold for cash on a delayed basis in the same way that the sale of wheat or dates for cash may lawfully be contracted on a delayed basis? Or in the same way that it was lawful in the past (under the gold or bimetal Standards) to seil wheat or dates or any other ribawi commodity, or non-ribawi, for gold when it was offered as a delayed payment? Our opinion on the matter is that it is deserving of further study. Firstly, because gold is no longer a currency, but a commodity to be bought and sold like any other.
Further study is required, secondly, because of the meaning found in the hadith of “Ubadah, “.. .If these categories differ, then seil however you like as long as the sale takes place hand to hand.” What this suggests, literally, is that it is not lawful to sell a ribawi commodity for another commodity on a deferred basis. That would mean that it is not lawful to seil wheat or barley for a deferred payment in gold. The consensus of the jurists, however, was that such a sale is lawful. Thus, the question arises as to whether or not a modern day scholar of fiqh has the right to declare lawful the sale of gold for a deferred payment in dollars? For, after all, the dollar has taken the place of gold as (the accepted Standard for) currency; and gold has become just another commodity, like wheat or dates, even though it is still considered a ribawi commodity.
This is a subject that is in need of serious consideration, and it is our recommendation that it be studied by the SharIah Supervisory Boards of Islamic banks and financial institutions. Thereafter, the results of their studies may be considered before a final, collective decision is made on the matter. Until this happens, the Board recommends acting in accordance with a literal interpretation of the hadith, and that is the basis for its answers to the questions above.
Question 265 International Trade in Gold
The international trade department of the bank deals in gold in the following manner:
1. Gold and silver are purchased and the füll price is paid.
2. Gold is received and then stored in the treasury of the correspondent bank in the (Islamic) bank’s name.
3. When a purchaser for the amount of gold is found, one Willing to pay a price acceptable to the bank, the bank will sell the gold, hand to hand, such that it delivers the gold to the purchaser and receives payment from him/her at the same time and place, so long as this is profitable.
4. At times, the bank will enact a promise to seil the gold it possesses at a later time and for a price higher than its own purchase price. This is done with the understanding that delivery of the goods and receipt of the price will take place hand to hand at the appointed time, and without any advance.
5. It is also possible that, at times, a promise will be made to seil gold later, and that the sale will be covered in a contractual promise to purchase the gold at an appointed time, such that the bank will take delivery of the goods at the appointed time for the sale that was promised earlier, and for a reasonable price.
6. The (Islamic) bank also deals in Operations for the sale and purchase of foreign currency, consolidating its position daily.
The management of the bank requests clarification in regard to the Sharp ah rulings on each of the Operations mentioned here.
Fatwa
After the Board reviewed the memo on the subject of trading in gold from the International Department of the Bank, it saw fit to explain:
First: the texts and the opinions of the classical jurists in relation to the sale of (items in) ribawi categories when these (the two items to be exchanged) are different.
Second: the texts and the opinions of the classical jurists in relation to promises and whether or not these are legally binding.
On the First Subject: “Abd al Razzaq, Ahmad, and Ibn Majah included a hadith in their collections in which Ibn ‘ Umar related that he asked (about delayed exchange) and the Prophet, upon him be peace, replied, “Buy gold for silver. But when you take possession of one of the two, do not leave your companion (the seller) wondering.” The meaning here is that in the sale of gold for silver the deal must take place on the spot, or “hand to hand.”
Imam Bukhari narrated a hadith in the Book of Sales (in his Sahih) in the chapter entitled The Delayed Sale of Gold for Paper Money on the authority of Abu Minhai who said, “I questioned both al Barra’ ibn ‘Azib and Zayd ibn Arqam about exchange, and each of them told me that the other was better than himself. But they said, ‘The Prophet of Allah, upon him be peace and blessings, prohibited the sale of gold for paper as credit.'”
On the Second Subject: The Opinions of the Classical Jurists in Regard to Promises
In the book entitled, Fath al “Ali al Malikfi al Fiqh ‘ala Madhhab al Imam Malik, there is reference to the opinion of al Hattab on the subject of promises.
As to a promise, the one who makes it binds himself to nothing in the present. Rather, (a promise) is initiation by the informer of something (to be) known in the future. There is no difference of opinion as to the (legal categorization) of honoring a promise “recommended”.
1. The jurists differed variously, however, in regard to judicial rulings on promises:
2. They are to be ruled binding in all cases.
3. They are not ruled binding in any case.
They are to be ruled binding if a reason is given for (soliciting) the promise, even if the one soliciting it does not (as a result) become involved in something (perhaps to the point of liability). For example, one might say, “I want to marry, or to buy something, or to pay off my creditors, so lend me some money.” Or s/he may say, “I want, tomorrow, to ride to a certain place, so lend me your mount.” Or “I want to plow my fields, so lend me your oxen.” Then, if the other party says, “Yes,” and then s/he decides to marry, or to buy, or to travel, the promise will be binding, and judgment must be given accordingly.
But if no reason is given, the promise is not to be ruled binding. For example, if one says, “Lend me a sum of money” without stating why, and the other party says, “Yes.” If the person decides to take him/her up on the promise, s/he will not be legally bound to honor it. Or if someone says to another, ‘TU lend you a sum of money,” without saying why, or what for, and the other decides to take him/her up on the offer, the offer will not be binding.
4. They are to be ruled binding if a reason is given, and the one soliciting the promise then becomes involved in something. This is the majority opinion on the matter. Ibn Shubrumah said that all promises are binding, and that they must be upheld in court so that people are forced to honor their promises. Those who agree with Ibn Shubrumah’s opinion on the matter, cite the Qur’anic verse, Hateful indeed it is to Allah for you to say what you do not mean to do (45:35). They also cite the authentic hadith related by ‘Abd Allah ibn ‘Urnar in which the Prophet of Allah, upon him be peace and blessings, said, “There are four things which, if all of them are found in one person, guarantee that s/he is a complete hypocrite. And if elements of them are found in him/her, s/he will have elements of hypocrisy (in his/her character) until s/he leaves them. When s/he speaks, s/he lies. When s/he makes an agreement, s/he cheats. When s/he promises, s/he breaks it. And when s/he argues, s/he abuses.” And they quote the hadith related by Abu Hurayrah that the Prophet of Allah, upon him be peace and blessings, said, “Among the signs of a hypocrite are these three, even if a person prays and fasts and supposes him/herself a Muslim. When s/he speaks, s/he lies. When s/he promises, s/he breaks it. And when s/he is given a trust, s/he betrays it.” (For more on the subject of promises, see Ibn Hazm’s al Muhallah, Vol. 5).
On the basis of all that we have explained above concerning the opinions of the jurists on the subject of upholding promises in court and holding people to them…
In view of this and the ruling that nothing may be sold that has not first been received, even though taking possession may sometimes be accomplished by another’s simply relinquishing (possession), and sometimes by means of the receipt of documents proving ownership of goods that allow the purchaser to go to a warehouse and take possession, and so on, as long as the two parties agree, and there is no ambiguity in regard to the type or characteristics of the goods…
Then, in accordance with all of the above, there is no legal impediment to a promise, so long as the sale takes place after it, or the exchange, and this is compliant with the texts which stipulate that the transaction be “hand to hand” in the manner explained. And Allah knows best.
Question 266 Guaranteeing Gold
The Operations of the Bank include the sale of gold after its acquisition from international banks in Switzerland and elsewhere. There is a desire on the part of these banks that the gold remains guaranteed in the hands of the Islamic Bank for the entire period, i.e., from the Islamic Bank’s receipt of the gold at its headquarters to the time that a purchase by the Islamic Bank is completed or it is returned to the (Swiss or other international) bank. The means for achieving this objective for both the seller and the Islamic Bank, and the one which enables dealing and trading in the gold so that the Islamic Bank may realize profits, is that the Islamic Bank borrows the gold from the international bank or banks and thereby guarantees it. When buyers are found, we sell them the gold in our possession with our guarantee. And when the international bank seeks the return of its loan, it has the option either to seek the return of all of the gold it lent to us, so that we present it with whatever we have in our stores, or we entrust the bank with similar gold obtained on the market, or we agree with the bank to purchase the gold through a contract of sarf in which one of the two countervalues is our responsibility, the gold, and we deliver the other countervalue to the bank, i.e., the price of the gold at the prevailing market rate. Such a deal, then, will include a loan contract followed by the return of a part of the loan plus the responsibility to contract an exchange, sarf, for the rest. It is noted that the Sharp ah Board has already given its opinion with regard to the lawfulness of the responsibility to contract an exchange in murabahah transactions undertaken in foreign currencies.
Fatwa
There is nothing wrong with the deal described from the Sharp ah perspective because it includes the loan of gold and trading in it while it is the property of the seller-borrower (the Islamic Bank), and then a contract of exchange for the purchase of the gold for a price agreed to by both parties, on the condition that the price be paid immediately and without deferment.
The administration should, however, present the relevant contract, in translation, to the Shari’ah Board before taking any action in the matter. And Allah knows best.
Question 267 Standard Transactions on the Gold Market
Owing to the fact that investments in the trade of gold produce many of the factors considered desirable in good investments, the trade has become both populär and lucrative. Moreover, since Islamic banks do not deal in the currency markets in the ways that commercial banks do, the gold market has become the natural alternative. Moreover, while the gold market is subject to both profit and loss, it involves a greater element of security, and a higher degree of liquidity. Likewise, the element of risk involved is lower owing to the accuracy of projections, the general responsiveness of the market, and the rapidity with which transactions can be carried out.
There are many organized international markets for the trading of gold and other metals, and transactions in gold usually take place in bullion, in the form of ingots and bars or, in other words, before it is cast. While there are specialists who transact in gold in a variety of different ways, we are concerned here with only two kinds of transactions.
1. Purchase, receipt, and storage when market rates decline, followed by sale and delivery after market rates have risen.
2. A promise to purchase and to seil simultaneously or what is commonly known as a currency swap. In this transaction agreement is negotiated on detailed specifications for the commodity, exact quantity, the date of receipt when it is to be purchased, and the date of delivery when it is to be sold. When the appointed time comes, the promise is met.
As there appears to be nothing objectionable in either of the two transactions described above, the Bank has proceeded to deal in them as if they were perfectly lawful. Through its representatives, the Bank monitors the movements of local and foreign markets and issues its Orders accordingly.
Since transactions in gold are common in Islamic banks, and since there are differences of opinion in regard to how these should be carried out, we would appreciate a definitive Statement on the matter; one that will put an end to all debate on the matter and serve as a guide for all Islamic banks.
Fatwa
The Shari’ah considers gold and silver to be currencies, such that there is no difference between their various forms, whether as coins, or bullion, or jewelry. Whatever the form, the regulations concerning its exchange must be adhered to. Thus, gold and silver must be exchanged measure for measure and hand-to-hand, owing to the many hadiths that have come to us on the subject, none of which differentiate between bullion and coin. Among these hadiths is one mentioned by Ibn Taymiyah in his Muntaqa al Akhbar: Abu Sa’id related that the Prophet of Allah, upon him be peace, said, “Gold for gold, silver for silver, wheat for wheat, barley for barley, dates for dates, and salt for salt, measure for measure, and hand-to-hand. Anyone who adds or seeks addition will have taken interest; and in interest the giver and the seeker are the same.” This hadith was included in the collections of both Bukhari and Ahmad.
In his commentary on this hadith, Shawkani stated: “The words,’gold for gold are inclusive of gold in all of its varied forms, whether coin or cast, good or poor quality, sound or broken, jewelry or bullion, pure or impure.” Nawawi and other jurists have recorded that there is a consensus among scholars on this issue. From the foregoing, it is clear to us that there is no legal difference between gold and silver that is in the form of bullion…. and gold and silver that is in any other form.
Moreover, with regard to the exchange of gold and silver, in whatever form, for paper currency, or banknotes, it is our belief that exactly the same rules which apply to gold and silver will also apply to paper currency; whether these be the rules for zakah, or the rules for the exchange of currency, or whatever. This opinion is shared by a group of legal scholars in Saudi Arabia who wrote, in their decision dated 4/16/1393AH:
Currency is anything which custom and practice dictate as having value, such that there is general acceptance for it as a means of transacting business. This is the explanation given by Shaykh al Islam, Ibn Taymiyah, when he wrote: “Dinars and dirhams have no intrinsic or legal value. Rather, if they have acquired value it is because custom and practice have endowed them with value. In its original state, money was not sought after for itself, but rather as a medium of exchange and an abstract measure of values. Thus, the importance of dinars and dirhams is derived from their functioning as a medium of exchange. It is for this reason precisely that they are considered currencies.” Later, in the same book, Ibn Taymiyah wrote: “Thus a true medium, one to which no purpose attaches either in its concrete or its abstract form, may serve a purpose regardless how it is configured.” See page 251 of volume XXIX of Ibn Taymiyah’s collected Fatawa.
Imam Malik expressed the same meaning in al Mudawwanah al Kubra, when he stated: “If people agreed to use leather as their currency, I would have to voice legal objections to its delayed sale for gold or paper currency.” Thus, with regard to the first sort of transaction described in the question above, regarding the sale and purchase of gold and silver in international markets for paper currency, the rules governing exchange, sarf, will apply as explained.
With regard to the second transaction described above, if the promise is considered a legally binding one, the ruling will be the same as was mentioned before in regard to exchange. If, however, the transaction is not considered legally binding, the transaction will be subject to the rules for exchange.
Question 268 Promising to Buy Gold and Silver in the Future
What is the Shariah ruling with regard to a promise to buy or sell either gold or silver at some time in the future?
Fatwa
A promise to buy or sell gold or silver in the future opens the door to stratagems for the sale of debt for debt, which is a prohibited sale in all contracts. Such a sale is particularly abhorrent in a contract for the sale of gold or silver because the Divine Lawgiver emphasized the need for mutual receipt at the time the sale is concluded.
This is the opinion I have adopted after studying the evidence from the texts, and it is the one which most conforms to both the letter and spirit of the Shari’ah.
Question 269 Agency in the Sale of Gold
What is the Shariah ruling in regard to certain foreign banks that deposit amounts of gold with local money changers engaged to arrange sale of the gold on behalf of the banks? In some cases, moreover, the banks will decline to take insurance from the money changer, while in others they will, depending on the degree of trust they have (in the money changer they have engaged). Then the money changer will seil the gold, or some of it, at the current rate, either to him/herself or to another, and the price will be deducted from the amount credited to him/her by the foreign bank.
Fatwa
The Shari’ah views the money changer as an agent of the depositing bank, and the gold in his/her safekeeping will be considered a trust. The first rule in trusts is that they will not be guaranteed by the trustee except in cases of gross neglect or willful destruction. It should be possible, however, in view of the spread of unreliability among people today, to guarantee the trustees by any of the various means of ensuring reliability. In our pious predecessors we have the best example because they guaranteed artisans against the destruction of materials held in their safekeeping. Furthermore, the money changer, in his/her capacity as an agent, has the right to a fee for this transaction, as long as the fee is mutually acceptable.
If the agent sells to someone other than him/herself, the matter will be clear, as s/he will be dealing within the parameters allowed by his/her agency. In keeping with the teachings of the hadith, the price will have to be received from the buyer without delay. The Prophet, upon him be peace, said, “Gold for gold, silver for silver, wheat for wheat, barley for barley, dates for dates, and salt for salt, measure for measure, and hand-to-hand. Anyone who adds or seeks addition will have taken interest; and in interest the giver and the seeker are the same.” Moreover, the account between the moneychanger/agent and the bank will operate on the basis of muqassah, or the mutual cancellation of loans.
If the agent sells the gold to him/herself, the bank will have to be notified of the same so that the deal may be completed between the two parties directly, as stipulated by the Shari’ah for this sort of transaction. Certainly, by adhering to customary business practices, transactions of this nature will be facilitated. Moreover, if the bank agrees to deduct the sale price from the agent’s account, this may be seen as fulfilling the requirement for direct and immediate (hand-to-hand) exchange. If the agent has no account with the bank, then s/he must arrange to make immediate payment in accordance with regulär accounting procedures.
By Yusuf Talal DeLorenzo.
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