Ways to pledge gold at Ar-Rahnu (Part 1)
One of the many advantages of gold investments is that our capital is not ‘locked’ as long as we hold on to the gold items. Since we have the gold in our possession, there is no risk of loss, and we have 100% control over it.
If we save our money in a bank account, they essentially control the money. And this allows them to leverage our money by investing them elsewhere for a more significant profit. Otherwise, how would the bank give us the annual dividend, am I right?
With gold, however, it is entirely different. There is no need to sell the gold if there is an urgent need for cash. We can proceed to pledge the gold for a quick loan at Ar-Rahnu centre. The money would be handed over upon processing on the same day. Once we receive the funds, we can use them to address our concerns, and within the agreed duration, we can return the money and reclaim the gold items. That is how the small business owners have been managing their funds with gold.
Some businesswomen who run small scale stalls would utilize their gold items (jewellery primarily) as business capital to address their business needs, such as restocking inventory, paying bills, maintenance fees, etc. Once they get their business profit, they would then pay back the loan (and the custodian fee) and reclaim their gold.
The steps involved in doing this are pretty straightforward. We have to bring the gold items to any Ar-Rahnu centres and take care of everything else.
Where can I pledge the gold items?
The quick answer is to pledge the gold items at Ar-Rahnu centre (halal) and not at the usual pawn shop (non-halal). Not all banks have this feature, so we need to do some searching (a simple Google search would do the trick) to find the nearest place to your home. Typically, Islamic banks would have this feature, and if you are in Malaysia, perhaps dropping by Ar-Rahnu Pos Malaysia can be an option to pledge the gold items. Things to note are that different Ar-Rahnu branch offices might have other formalities. This includes the maximum amount of gold they can receive, the types of documents required, the amount of money given out as a loan, the duration of the pledge, etc.
What do I need to bring along?
Things to bring along include the gold items, respective certificate of authenticity (if available) and purchase receipts. Some Ar-Rahnu centres do not require receipts, so kindly note this too.
The types of gold accepted by them
Gold jewellery (with no stones on them), gold bars, gold coins (dinar coins) are accepted for pledging. The hint here is as long as the items are of pure gold. Some places do not accept gold bars and coins but only gold jewelleries.
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Your buddy on gold investing,
Naresh G