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Resolutions of Iftaa' Board

Resolution No.(53): “ Ruling on Awards Offered by the Islamic Bank in Accordance with a Particular Mechanism“

Date Added : 02-11-2015

 

Resolution No.(53): "Ruling on Awards Offered by the Islamic Bank in Accordance with a Particular Mechanism“

Date: 8/8/1422 AH corresponding to 24/10/2001 AD

 

The Board recieved the following question:

What is the ruling when the Islamic Bank offers incentive awards to clients, who have investment accounts, in accordance with a particular mechanism (volume of the account, duration, added sums, and stability of the account)? How can we define the relation between the above clients and the Islamic Bank in light of these awards: a contract or an independent initiative on the part of the bank? If it is a contract, is it binding or not?

Answer: All success is due to Allah.

The Board of Iftaa` is of the view that it is permissible for the executive board of the Islamic Bank to distribute cash or in-kind incentive awards on these clients, and to cover their expenses in Hajj (pilgrimage) or Umrah (minor pilgrimage) or the like, if it is entitled to do so, provided that these awards are covered from the bank`s own earnings.

Moreover, it is impermissible for the bank to cover these awards from the total of the investment profits because this entails giving a portion from the share of the owners of these accounts as a sort of contribution, and this is forbidden in Sharia because the Mudarib (bank) isn`t allowed to give from the money of the Mudarabah (co-partnership), except with the permission of the owners (clients who have investment accounts). If they allow that, then it is permissible for the bank to cover these awards from its overall profit. In this case, offering these awards is considered a donation/grant on the part of the bank, and becomes a binding promise if it had made an announcement about that earlier. In addition, it can`t be considered a condition in the Mudarabah contract between the bank and the owners of the investment accounts because some of them may receive awards; whereas, others may not.

In this case, the board of directors enjoys the authority to lay down the legal terms and regulations pertaining to giving these awards (volume of the account, duration, added sums, and withdrawals), and to determine the type of the investment account (savings, deferred etc.) eligible for that, whether to all clients or to some of them.

Moreover, it isn`t permissible for the bank to distribute these awards on the owners of credit accounts (current accounts) for there is a suspicion of Riba (usury) similar to the ruling on loans because every loan that leads to a benefit is unlawful.

Based on the aforementioned, it is obvious that the relation between the Islamic Bank and the investors in light of these awards isn`t contractual, rather, it is an individual initiative undertaken by the free will of the Bank`s Administration. And Allah Knows Best.

Iftaa` Board
Chairman of the Iftaa` Board, Chief Justice, Izz Al-Deen Al-Tamimi
            Dr. Mohammad Abu Yahia
           Dr. Abdulsalam Al-Abbadi
    Dr. Yousef Gheezaan
Dr. Wasif Al-Bakhri
   Sheikh Saeid Hijjawi
        Sheikh Na`eim Mojahid

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Summarized Fatawaa

What is the ruling on swimming while fasting?

Swimming while fasting is disliked (makruh) due to the risk of water entering the body cavity (jauf) through the nose, ears, or mouth, which would break the fast.
Ramadan is a month of tasbeeh (glorifying Allah), not Sibaha (swimming).

What is the ruling on men wearing rings (those made of silver and of other metals, such as iron), and are there conditions for men wearing rings?

All praise is due to Allah, and peace and blessings be upon our master, the Messenger of Allah.
It is sunnah for men to wear a silver ring on the right hand, following the practice of the Prophet (peace and blessings be upon him). It is reported in Ṣaḥīḥ al-Bukhārī, on the authority of Anas ibn Mālik (may Allah be pleased with him), that the Messenger of Allah (peace and blessings be upon him) took a silver ring and had “Muḥammad Rasūl Allāh” engraved on it. He said: “I have taken a ring of silver and had ‘Muḥammad Rasūl Allāh’ engraved on it, so let no one engrave the like of its engraving.”
It is a condition that the silver ring not exceed the size customary in the local norm (ʿurf). If it does, that is extravagance (isrāf). A ring made of a metal other than silver, such as iron or copper, is permissible to wear without disapproval (karāhah), except gold, which is forbidden (ḥarām) for a man to wear.
It is stated in Mughnī al-Muḥtāj (Vol.1/p.586): “It is permissible, without disapproval, to wear a ring of iron or lead. It is sunnah for a man to wear a silver ring on the little finger of his right or left hand. Wearing it on the right is better, and it is permissible on the left, and on both together.”
It is also stated in Mughnī al-Muḥtāj (Vol.2/p.97): “It is lawful for him, that is, the man, and likewise the khunthā (person of indeterminate sex), indeed all the more so, to wear a ring of silver, by consensus (ijmāʿ), because the Prophet (peace and blessings be upon him) took a ring of silver, narrated by the two Shaykhs (al-Bukhārī and Muslim). Wearing it is in fact sunnah, whether on the right or the left, though the right is better according to the sound position, as stated in the chapter on clothing in al-Rawḍah… The Shāfiʿī jurists did not specify the permitted size of the ring, and they probably relied on custom (ʿurf), that is, the custom of that country and the habit of people of his standing in it. Whatever exceeds that is extravagance, as they said regarding a woman’s anklet. This is the reliable position (al-muʿtamad).” And Allah Almighty knows best.

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