Question : A question was asked about [the validity of] the investment certificates that have prizes.

Fatwa in Brief: These are illegal; they are a form of gambling.

The Permanent Committee, no. 4/443

Shaykh Yassir Birhami at www.alsalafway.com

Response:

In legal terms, the prizes awarded to winners of investment certificates type (g), and to those with savings accounts (daftar tawfir) are to be treated as gifts (hibat), which some scholars permit.

Commentary:

In legal terms, the prizes offered to winners of investment certificates type (g), and to those with savings accounts (daftar tawfir), are to be treated as gifts (hibat); and are thus permitted by some scholars. They do so on the grounds that such gifts do not gain a person interest, and the amount and timing are not specified in advance. If these conditions are not ment, and [in particular] if it is possible for a person to lose money through these offers, then they would need to be treated as forms of gambling, which is forbidden. The condition for something to be described as gambling is that the partners are not excluded from gain or loss; that is the particular feature of gambling. As this is not the case –since these prizes involve only gain and do not entail any loss if the particpant does not get the prize –therefore, it is permitted to own investment certificates type (g) or saving accounts, and to take the prizes offered with them.

And God knows best.

Dr. Anas Abu Shadi