Is Opening a KFH Hassad Account with a Prize Draw Permissible?
Shafi'i Fiqh
Answered by Shaykh Muhammad Carr
Question
Is opening a Hassad account with Kuwait Finance House (KFH) in Bahrain, which enters depositors into a draw to win $1,000,000, halal or haram?
KFH is an Islamic bank. They keep calling me to encourage me to deposit funds, but I have not done so because I do not believe it is halal.
Answer
In the Name of Allah, the Most Merciful and Compassionate.
Thank you for reaching out and seeking clarification on this important matter. It’s commendable that you seek to ensure that your investment accounts are shari’a-compliant.
Opening an Al-Hassad Investment Account that enters depositors into a draw to win $1,000,000 is permissible. Prizes granted under the AI-Hassad Prize Program are funded by the Bank’s funds, not depositors’ funds. [kfh.com] The depositor thus stakes nothing and loses nothing.
The underlying contract is not a current account based on a loan agreement. Therefore, the principle of a loan that brings a benefit (qard jarr manfa‘a) does not apply. It is for this reason that ‘The Bank Fatwa and Shari’ah board has approved the prizes program for the investment accounts’. [Ibid]
Prizes on Investment Accounts
According to the AAOIFI Shari’a Standards,
3.5.2 It is permitted for the institution to give prizes to investment account holders on condition that:
3.5.2.1 The prizes do not come from the investment accounts, the profits, or the charity account. It may come from the bank shareholders’ account.
3.5.2.2 The giving of these prizes must not amount to guaranteeing the invested capital or part of it.
3.5.2.3 The opportunity to win must be available to all participants in the investment account or in one of its categories. [See AAOIFI]
You may open an Al-Hassad Investment Account with a clear conscience. Allah says, ‘O you who believe forbid not yourselves the fair viands of what Allah has made lawful to you: and exceed not the proper due bounds; Verily Allah loves not those who commit excess’. [Quran, 5:87]
I pray this is of benefit and that Allah guides us all.
[Shaykh] Muhammad Carr
Checked and Approved by Shaykh Faraz Rabbani
Shaykh Muhammad Carr has dedicated his life to studying and transmitting our beautiful deen. His studies have taken him around the globe, where he has benefitted from many luminaries. Under the guidance of his teachers – Shaykh Taha Karan, Shaykh Yaseen Abbas, Shaykh Muadh Ali and many others – Shaykh Muhammad has grown to appreciate the beauty and benefits of diverse scholarship. He completed his memorization of the Qur’an at Dar al-Ulum Zakariyyah in September 1997 and received an Alimiyya Degree in 2006 from DUAI (Darul Ulum al-Arabiyyah al-Islamiyyah). He is also affiliated with Masjid Auwal in Bo Kaap, Cape Town (the oldest mosque in South Africa), where he serves as a co-imam, and Dar Al-Safa, where he has taught since 2018. As a teacher, he imparts the wisdom of our heritage and tradition by opening the door for students. As an imam, he has the unique opportunity to serve his community in daily life.
In addition to his roles as a teacher and imam, Shaykh Muhammad Carr has contributed significantly to the administrative and advisory aspects of Islamic institutions. Since 2023, he has served as the Administrative Director at The Imam Kurani Institute, contributing to the institution’s growth and development. He continues to pursue traditional Islamic Sciences, possessing a keen interest in Islamic Contract Law and Finance. Shaykh Muhammad has been a Shari’ah Board Member for Islamic Asset Management & Insurance Companies since 2001, aligning financial practices with Islamic principles.
