What is the ruling on lending gold by delivering its value to the borrower, on the condition that he returns gold or its equivalent in money by mutual agreement, and does mutual agreement and its being a form of cooperation rather than a true debt affect the Shariah ruling?

It is permissible to lend gold, and it is obligatory to return it as gold. It is not permissible to agree beforehand to return it as cash, in order to avoid riba (usury). However, it is permissible to agree to return it in a different currency at the exchange rate prevailing on the day of repayment only.

If the borrower is unable to take possession of the gold himself, he should appoint someone other than the lender to take possession of it and sell it. However, if the borrower is in dire need and is certain that the lender will lend him real gold and undertake its sale, then there is no harm in the borrower authorizing the lender to sell the gold and receive its price in cash. The loan remains a debt of gold owed by the borrower, and it is not a condition to take possession of the loan before selling it.

There is no harm in forgiving the borrower by granting him an extension or by giving him the entire debt or a part of it as charity. It is not a condition for a loan to specify a due date for repayment. This does not alter the permissibility of authorizing the lender to sell the loan, nor the prohibition of agreeing beforehand to return the gold as silver or cash.