Current Legal Issues
- BANKING AND FINANCIAL SERVICE
Among bank services is the realisation of the amount of a bill of
exchange for its customers. This is done by informing the signatory of
the bill before the expiration of the prescribed period so that he be
ready to pay. When the money is realised, the amount is credited to the
customer's account or be paid to him in cash. The bank charges
commission for this service. Similarly, the bank could cash a cheque for
its bearer from his country or another country, in the event the bearer
does not wish to do it himself. The bank may charge commission for
rendering such service.
- (25) Realisation of the amount of a bill of exchange and
charging commission may take different forms:
- The beneficiary may approach the bank to realise the amount of the
bill, that is not written out in its favour, for a certain amount of
Apparently, this type of service and charging commission for it is
permissible, provided that the job of the bank is confined to the
realisation of the amount of the bill. As for the collection of its
usury interest, it is not permissible. From jurisprudence viewpoint,
the commission could be treated as ji'aala
from the creditor to the bank for collecting its debt.
- The beneficiary may submit to the bank a bill of exchange and
instruct it to pay it, but the latter is not a debtor to the person
who signed the bill, albeit the bank is a debtor to the signatory
for a currency other than the one made out in the bill.
In such a case, it is permissible for the bank to charge commission
for accepting the bill of exchange - according to the condition
discussed earlier on.
This being so because non-acceptance is the prerogative of the party
who is not a debtor. The same goes for the debtor with a currency
that is different from that which the bill was issued in.
There is no harm in charging some money in return for forgoing one's
- The beneficiary submits to the bank a bill of exchange for payment
and debits the account of its customer. That is, after notifying the
bank of the due date of payment so that the bank would debit its
value to the current account of the customer and credit the account
of the beneficiary (the creditor) or pay its amount in cash to him.
This is because the person signing the bill of exchange has referred
his creditor to the bank that is indebted to him. Thus, this could
be treated as money order on the debtor. What matters, as has
already been explained, is the acceptance of the party who is going
to settle the amount in the money order, which is the bank in this
case, as the bill would not be effective without this acceptance.
Accordingly, it is permissible for the bank to charge commission for
accepting the money order and settling the debt.