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f:380 -    Giving gold as loan
Country : Kuwait,
Name : Naveed Hussain
Question:     A certain person asked his friend for a loan of Rs. 80000.  The friend instead told him that he would give him gold worth Rs. 80000 and while returning, he would have to give the full quantity of gold back regardless of the price.  Is a loan like this permitted in Islam?  When the price of gold keeps fluctuating and it may increase or even decrease a bit at the time of returning?  How should the loan be repaid, it terms of the weight of the gold or in terms of the monetary value of the gold?
Answer:     In the Shariah, giving gold as loan is permissible.  If gold is taken as a loan, then as per the Shariah, the same quantity (weight) of gold has to be returned.  Here the fluctuations in the price of the gold are not considered, only the weight of the gold will be considered.  Thus, if Rs. 80000 worth of gold is taken, then the weight of the gold for the said amount should be returned at the time of repayment.  As given in Durre Mukhtaar, Vol. 4, Kitab Ul Buyu’

And Allah (Subhanahu Wa Ta’ala) knows best.  

Mufti Syed Ziauddin Naqshbandi Qadri

[Professor, Islamic Law, Jamia Nizamia,
Founder-Director, Abul Hasanaat Islamic Research Center]
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