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What To Do With Prize Money of Prize Bond?| Prize Bond Part 6 of 6| Molana Haris Rana| Hindi/Urdu
Fatwa about Price Bond.
Question
The Pakistani Government issues prize bonds of Rs.10, Rs.100, Rs.500 and Rs.750/ denomination each. It is up to an individual whether he purchases these bonds of Rs.10, 000/- or Rs.100, 000/-. It is like a currency bill which can be cashed at any bank. The Government promises to return the money at the demand and it is written on the bill.
Every quarter the Government draws the numbers of the winning bills and then a prize is announced like Rs.50, 000/- or Rs.100, 000/- on that particular number which can be claimed by the owner of that bill. The amount may be obtained at presenting the bill at the State Bank of Pakistan.
The prize bond’s value remains the same. As I have mentioned above it is like a currency bill but usually is cashed at local banks.
After the draw the other bills do not loose their value and are kept by the owner to wait for another draw and even if it never gets the prize the actual value remains the same. Usually people purchase these prize bonds against their savings and when the bond’s number comes in the draw then they are happy to get the prize. Some ullema’s say that this mode of business is unislamic.
Answer
It is not permissible to buy these prize-bonds as they include interest and gambling at the same time.
The amount that is paid for purchasing bonds is nothing but a loan because no person is giving this amount for business in order to risk making some profit or loss. Thus the prize bonds are in reality a loan with interest. Instead of the government or bank giving interest to every prize-bond holder, the interest accumulate and then a draw is conducted whereby some of the prize-bond holders win and others lose; this is the reality of gambling.
Doctor Ali Saluss says regarding this: “It may be possible that a person with a small loan win thousands of pounds, whereas other person’s heavy loans do not get anything. So the first person took his share of interest and the share of a large number of people, whereas the share of the second person is taken by others. Each time, involved people who watch or follow this draw; become happy because of what they had won, or sad for what they had lost, and so on, waiting for another prize-bond draw. Is this not gambling?!”
Please refer to the following fatwa…
Allah knows best.
Are Prize Bonds Halal?
There are two types of bonds:
1) Prize Bonds:£1 buys you 1 bond. No interest is accumulated or paid. You are always able to redeem your bonds for cash – the same amount as you paid originally. Periodically, a number of ‘prizes’ are distributed and every bond has an equal chance of winning a prize. You may win much or nothing. But you cannot lose your investment.
2) “Bonds” in the traditional sense: You can purchase, for example, government bonds whereby you invest £1000, on which the government will guarantee you a 4% annual return.
There is no doubt that that number 2 is purely riba-based and hence haram as you have mentioned previously.
My question is whether number 1 is also haram?
Answer:
Prize Bonds
A prize bond in which the original investment remains and one is able to redeem the bond for cash is also unlawful in Shariah.
The reason for this is that, in prize bonds interest is added (according to the ratio of investment) to each person’s original investment and gathered in a joint pool. Then, instead of returning each person their interest, it is all given to the individual who won the prize. Therefore, this prize is pure interest and unlawful.
Due to the original investment being safe, it does not fall within the definition of chancing and gambling which is also unlawful. However, scholars mention that it resembles chancing in that the interest accumulated on the original investment is uncertain. One may receive this interest and more (in the case of winning a prize) or not receive any interest altogether.
In light of the above, any prize received by purchasing these bonds is regarded as Riba, thus unlawful, and included in the Hadith:
“Any lending arrangement which results in some benefits to the lender, is one of the kinds of Riba” (Sunan al-Bayhaqi).
It should be remarked here that the purchaser of theses bonds in reality and according to the principles of Islamic Fiqh is considered to be a lender and not merely a purchaser.
Those that do not receive any prize on the bonds are also sinful due to the fact that they purchased theses bonds with the intention of gaining a prize (interest) which is also unlawful.
In conclusion, purchasing prize bonds in reality is lending money to the issuers of these bonds. Any prize received will be considered Riba, thus unlawful. It will also be impermissible to invest in these bonds with the intention of receiving a prize.
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