Zakat by means of banknotes

Question

If someone gave banknotes in zakat, will the zakat be paid or not? Most people give their zakat to Arabic madrasas in banknotes only, by post or by other means. How will zakat be paid in this case?

Answer

The banknote, in terms of its origin, is a hawala (transfer of debt) and a document (sanad), not property. But in this age the rupee has almost disappeared, all business is conducted with banknotes only, and everywhere the banknote is regarded without hesitation as a substitute for the rupee, indeed as more valuable than the rupee.

Source: Fatawa Mahmudiyya

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