Prize Bonds Halal In Islam?

Are Prize Bonds Halal In Islam? | What about Prize Bond

People who invest in prize bonds are frequently concerned about their Islamic authenticity, such as whether the prize bond is halal in Islam or whether winning money is haram. It is also important to understand whether or not prize bonds are permissible in Islam.

In light of Ulma’s statements, we will answer all of these questions in this article.

Prize Bonds Basics

Prize bonds are a financial instrument issued by governments to finance public borrowing. When a government requires funds, it will turn to external lenders such as the IMF, World Bank, and so on (called external debt).

Related Articles

It may also borrow money from within the country (known as local debt), such as commercial banks, printing currency notes, or borrowing from citizens through public borrowing arrangements (such as prize bonds and national saving schemes).

On the surface, prize bonds may appear to any layperson unfamiliar with the principles of finance and economics to be non-interest-bearing security. However, in the case of Prize Bonds, the cumulative interest (Riba) is paid out to a select group of bond owners in the form of prize money.

The amount paid for purchasing bonds is nothing more than a loan because no one gives this amount to a business to risk making a profit or losing money. As a result, the prize bonds are essentially a loan with interest. Instead of the government or a bank paying interest to every prize-bond holder, the interest grows. The reality of gambling is that a draw is held in which some prize-bond holders win, and others lose.

In prize bonds, interest is added to each person’s original investment (following the investment ratio) and accumulated in a communal pool. Then, rather than returning each person’s interest, it is all given to the person who won the prize. As a result, this prize is purely speculative and illegal.

Because the initial investment was safe, it does not fall under the definition of chancing and gambling, which is also illegal. Scholars note, however, that it is similar to gambling in that the interest earned on the initial investment is uncertain. As a result, one may receive this interest and more (by winning a prize) or receive no good at all.

Hadith About Prize Bonds

According to Hadith:

“Any lending arrangement which results in some benefits to the lender, is one of the kinds of Riba” (Sunan al-Bayhaqi)

Respected Ahl-e-Sunnah scholars worldwide have issued numerous rulings classifying such prize bond income as Haram, primarily due to the inherent element of Riba in prize money.

Conclusion Of Are Prize Bonds Halal

As a result, we can conclude that purchasing these prize bonds is prohibited because they combine gambling and interest. Buying prize bonds are effectively lending money to the bond’s issuers. As a result, any prize received will be deemed Riba and thus illegal. It will also be unlawful to invest in these bonds to win a prize.

Aside from that, keep in mind that those who do not receive any prize on the bonds are also wrong because they purchased these bonds to receive compensation (interest), which is also prohibited.

Respected Ahl-e-Sunnah scholars worldwide have issued numerous rulings classifying such prize bond income as Haram, primarily due to the inherent element of Riba in prize money.

Yes, prize bond income is Haram, owing to the inherent element of Riba in prize money. According to Islamic Scholars.

Yes, because the government issues these prize bonds, they are legal. The draws were conducted by the Ministry of Finance and state banks.

See also  How to Claim Prize Bond? Complete Guide 2022

Leave a Reply

Your email address will not be published.

Back to top button