Gifts and Cash Incentives offered by the Bank to Account Holders

As a prelude, it is important to understand that funds accumulated in a conventional bank are a mixture of lawful (halal) and unlawful (haram) wealth. They are made up of capital invested by the bank owners and shareholders, deposits of account holders, and impure interest money. The portion of interest is actually less in comparison to the other two sources, and as such it can be said that the majority of capital stored in a bank is Halal. It is for this reason; contemporary scholars allow carrying out Halal, non-interest related jobs at a bank, such as a guard, cleaner or cook, even though the salary is paid from the bank funds.

Based on this, there are various scenarios when it comes to accepting gifts from a bank:

1) If the gift is offered to someone who is employed by the bank; then,

a) If his job is haram – such as being a manager, cashier, clerk, etc, where one assists and is directly involved with interest-based transactions – then it is not permitted to take the gift. In fact, one should try one’s best to find an alternative halal job, for it is sinful to assist with interest-based dealings.

In a hadith, the Messenger of Allah (Allah bless him & give him peace) invoked curse (la’na) on the one who receives interest, the one who pays interest, the scribe and the two witnesses [of the interest transaction]. And then he said, “They are the same [i.e. in sin].” (Sahih Muslim)

b) If one’s job at the bank is lawful, like being a cleaner, then it is permitted to accept the gift.

2) If the gift is offered to someone who has no connection with the bank, i.e. one is neither an employee nor an account holder; then it is permitted to accept the gift.

3) If the gift (in cash or other form) is offered to an existing account holder or, as an incentive, to someone opening an account; then,

a) If it is agreed beforehand (mashrut) or expected due to customary practice (ma’ruf), then it is interest (riba) and as such unlawful.

When one deposits money into a bank – regardless of it being a current, savings, interest-earning or non interest-earning account – one essentially forwards a loan to the bank, which the bank guarantees to pay back. The juristic principle (qa’idah fiqhiyya) concerning loans – reported as a hadith, as well as a statement of certain companions – is that, “Any loan that draws a benefit is [a form of] usury (Kullu qardin jarra naf’an fa-huwa riba).” (Sunan al-Bayhaqi, Al-Ashbah wa ‘l-Naza’ir, and Radd al-Muhtar 5/166)

As such, in accepting gifts from the bank, one derives benefit from the loan forwarded, and hence the gift is a form of unlawful interest (riba). In other words; just like it is impermissible to earn interest on a bank account, it is unlawful to accept cash incentives and free gifts, for they essentially are also interest. If the gift is accepted, it should be given away in charity to the poor, without intending any reward, but merely to rid oneself of unlawful wealth.

b) If there is no prior agreement between the depositor/account holder and the bank, neither is it customary for the bank to offer gifts to its depositors; rather, the bank on its own accord offers some cash or gift, then it is permitted to accept it. In this case, the gift will not be deemed as interest.

And Allah knows best