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Fatwa Number : 3518

Subject : Ruling on Prizes for Savings Accounts in Islamic Banks

Classified : Current Financial Issues

Fatwa Type : Search Fatawaa


Question :

What is the ruling on taking prizes for savings accounts in Islamic banks?


The Answer :

Praise be to Allah the Lord of the Worlds.

Savings accounts in Sharia-compliant banks entitle depositors to receive returns and make deposits and withdrawals freely. This kind of accounts is governed by rules of Mudarabah contract where the bank is the Mudarib (Fund manager) and the holder of the savings account is Rab Al-Mal (The investor).

Scholars have permitted the Mudarib to give presents or prizes to Rab Al-Mal with conditions:

First: They aren`t from the profits of Mudarabah transaction, because it isn`t permissible for the Mudarib to give any portion of the Mudarabah money without the permission of Rab Al-Mal.

Second: They don`t guarantee the capital of the Mudarabah.

Third: They aren`t from the overall gains of the bank, because depositors have right in this money and it isn`t permissible for the Mudarib to give gifts from their money without their approval.
Prizes, which Islamic banks distribute amongst holders of savings accounts, are considered a gift and a binding promise if the bank had announced giving prizes. Resolution No.(53) by the Iftaa` Council states, "It is permissible for the administration of the Islamic Bank to distribute, amongst the holders of investment accounts, cash or in-kind incentive prizes or cover Hajj or Umrah expenses and the like if it is authorized to do so. This is provided that the prizes are paid for from the bank`s own profits."

In conclusion, holders of savings accounts in Islamic banks are permitted to take prizes against the deposits they make. And Allah the Almighty knows best.




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