What is the ruling if currency loaned becomes invalid or counter-stamped after being prohibited by the Sultan?
Chapter on Loan (Qard)
Al-Mughni
Book of Sales
Primary text
If the loaned item was currency (fulus or broken coins) and the Sultan prohibited their use, rendering transactions with them void, the lender is entitled to the equivalent value of the currency at the time it was taken. This value must be paid to the lender, and acceptance of the invalid currency is not obligatory, whether the borrower still possesses it or has consumed it, because the defect occurred while it was in his possession. Ahmad stipulated this ruling for broken dirhams, determining the value based on what they were worth on the day they were taken.
Supporting text
Al-Qadi stated that the above ruling applies only if people universally agree to cease using the currency. If people continue to transact with it despite the Sultan's prohibition, its acceptance becomes obligatory. Malik, Al-Layth ibn Sa'd, and Al-Shafi'i hold that the lender is entitled only to the equivalent amount loaned because the prohibition by the Sultan does not constitute a defect that occurred to the item, thus it is analogous to a decrease in its price.