3 years ago a person loaned money to his friend in Pakistan. He sent pounds via money transfer and the friend received it as rupees. The amount then was 200,000 Rupees
Now the friend is paying the loan back but the exchange rate is different today than 3 years ago. If he pays him 200,000 Rupees he will receive £90 less than what he sent 3 years ago.
How much can he claim, the 200,000 Rupees or the full amount of pounds he sent 3 years ago?
If the agreement was a set amount of pounds then the loan must be returned in pounds. In this case the creditor is just exchanging the currency on behalf of the debtor for ease of access. The loan is the amount of pounds given.
If however, the agreement was to loan 200,000 rupees then the repayment must be the exact amount in rupees.
Ifta Research Fellow
Checked & Approved by:
Mufti Abdul Rahman Mangera
Mufti Zubair Patel