Rafed English

Bill of Exchange

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 right.

- 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.

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