Author: Dr. Muhammad Ziya-ur-Rahman Azmi رحمه الله
◈ Ruling on the Sale of Paper Money in Exchange for Coins ◈
According to the preferred opinion:
✔ There is no harm in exchanging paper currency for metallic currency (such as coins),
✔ Even if the amounts differ,
✔ Provided the exchange is done hand to hand, in the same session (Majlis al-ʿAqd).
This is because:
Ribā al-Faḍl (usury through excess) only applies when both exchanged items are of the same kind.
The Prophet ﷺ said:
"When the types are different, sell as you wish, provided it is hand to hand."
Ṣaḥīḥ Muslim 1587/81
If a man sells 10 paper riyals in exchange for 9 metal riyals (coins), and both deliver and receive the money on the spot,
The transaction is valid and permissible.
✖ If one party delays the delivery or receipt of the amount,
✖ The sale becomes invalid.
For instance:
Ibn ʿUthaymīn – Nūr ʿala al-Darb 29/235
◈ Ruling on the Sale of Paper Money in Exchange for Coins ◈
❖ The Ruling:
According to the preferred opinion:
✔ There is no harm in exchanging paper currency for metallic currency (such as coins),
✔ Even if the amounts differ,
✔ Provided the exchange is done hand to hand, in the same session (Majlis al-ʿAqd).
This is because:
Ribā al-Faḍl (usury through excess) only applies when both exchanged items are of the same kind.
❖ Supporting Hadith:
The Prophet ﷺ said:
"When the types are different, sell as you wish, provided it is hand to hand."
Ṣaḥīḥ Muslim 1587/81❖ Example:
If a man sells 10 paper riyals in exchange for 9 metal riyals (coins), and both deliver and receive the money on the spot,
The transaction is valid and permissible.❖ Impermissible Scenario – Delayed Exchange:
✖ If one party delays the delivery or receipt of the amount,
✖ The sale becomes invalid.
For instance:
- One person gives 10 paper riyals in the morning,
- The other says: “Come back at ʿAsr and I’ll give you 9 coins,”
✖ This is not permissible, because it involves ribā al-nasīʾah (usury through delay).
Ibn ʿUthaymīn – Nūr ʿala al-Darb 29/235