Fatwa ID: 06965

Answered by: Maulana Abdul Malik

Question:

If a person has lent £3000 10 years ago to someone in Pakistan, and they received 6 lac rupees.

But today due to inflation and different currency exchange rates, would the person pay 6 lac rupees or pay it back in £s?
As 6 lac rupees today is £1700. But £3000 is around 10.5 lacs.

There was no agreement in place of how the money will be repaid.

In the name of Allah, the Most Gracious, the Most Merciful

Answer:

The loan will be returned in the exact currency that was borrowed in the scenario that is described. As a result, the loan will be returned in pounds if it was borrowed in pounds, and in rupees if it was borrowed in rupees. Inflation will not be taken into account. (Raddul Muhtar, pg 390, vol 7)[1]

Hence, the money should be repaid in the borrowed currency.

[1] ولا يغرم قيمتها وكذا كل ما يوكل ويوزن، لما مر أنه مضمون بمثله فلا عبرة بغلائه ولا رخصه.

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Only Allah (عز و جل) knows best.

Written by Maulana Abdul Malik

Checked and approved by Mufti Mohammed Tosir Miah

Darul Ifta Birmingham