Current Legal Issues
- BANKING AND FINANCIAL SERVICE
Bonds are certificates issued by legally competent authorities with a
specified nominal value and an appointed maturity date. These bonds
could be sold, for cash, for less than their real value. For example, a
bond bearing the value of one hundred Dinars could be sold for ninety
five Dinars. The buyer of the bond shall receive the full amount
specified in the bond on its maturity date, say after a year. Banks may
be involved in the selling process for a commission.
- (18) This transaction is of two types:
- The party issuing the bond borrows from the buyer the sum of
ninety Dinars, mentioned in the previous example. The bank then
pays him back the sum of one hundred Dinars at the appointed
date in settlement of the debt. In the process, the five Dinars
in excess of the original amount borrowed was accounted for.
This is usury that is haraam.
- The party issuing the bond sells a hundred Dinars, payable
back, say in one year's time, for the cash price of ninety five
Although, this is not a usury loan in reality, yet its
validity on the basis of sale is within the domain of ishkal,
as is previously mentioned.
To sum up, it is not possible to justify the sale of bonds by
official parties and others.
- (19) It is not permissible for the banks to act as
intermediaries in buying and selling bonds. It is also not
permissible for them to charge commission for such transactions.