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 commission.
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.