HALAL WAYS TO USE A CHEQUE.

It sounds strange to some Muslims when such a subject is put on the spot light as one wonders "Halal (Permissible) Ways to Use a Cheque", is there non-halal ways of using a cheque? Because it remains a question, this brief article seeks to provide an answer or clarity on Sharia rules applicable on these instrument.

INSTRUMENT DEFINED.

A cheque is a certificate or paper issued in aperticular form containing an order issued by a person(payer) to another person (payee) to pay a certain sum of money to a third person (beneficiary) when the it is presented. In banking industry, cheque books containing 25, 50 or more is issued to current account holders as a safe payment instrument for either paying third party or self.

HALAL WAYS TO USE A CHEQUE.

According to AAOIFI Sharia Standard no 16 Commercial Papers, it is permissible to use a cheque in the following types of transactions and situations.

1. A cheque where the payer has a balance in his/her account drawn against himself or for the third party.
2. A cheque where the payer has no balance in his/her account drawn against himself or for the third party provided that such withdrawal doesnot lead to be charged 'Riba (interest)' by way of what is called an overdraft.
3. It is permissible to do endorsement in a cheque, provided the endorsement fulfil legal conditions and regulations.
4. A cheque can be used by the payer to purchase goods to be delivered later ( on maturity of the cheque) or on spot.
5. A cheque where the payer has a balance is permitted to use it in transaction that stipulate possession such as the exchange of currencies, the purchase of gold or silver.

It is not permitted to use a cheque in the following situations and transactions.

1. If the cheque will lead to withdrawal while there is no balance in the account and hence obliged to pay interest. Normally, Banks will not accept cheques drawn upon them by clients with no balance except by charging interest along the value of the cheque.
2. It is not permitted to discount cheque i.e receive less than the value of the cheque.
3. It is not permitted to use cheque that is not paid promptly (same day)for purchase of transactions that stipulate possession such as the exchange of currencies as well as the pruchase of gold or silver.

With above clarity, i hope we shall ensure the use of cheque is in permissible way and not otherwise.

May Allah accept our Sawm and Ramadhan Mubarak.