Promotional gifts and prizes
Gifts and prize schemes an institution offers to attract or reward customers, which AAOIFI addresses under specific Shariah and accounting rules.
Promotional gifts and prizes are benefits an institution offers customers to promote its products, such as gifts on account opening or prize draws among account holders. AAOIFI addresses their permissibility in its Shariah standard on competitions and prizes and their accounting in its standard on promotional gifts and prizes. A benefit tied to a loan-based account can amount to riba, so the structure and funding of such schemes are reviewed closely.
Sources
This entry explains a term; it is not a Shariah ruling. Approving a product is for each institution's own Shariah board and regulator.
Related terms
HibahA gift: a transfer of ownership without consideration, sometimes paid by banks at their discretion to account holders.QardA loan of money to be repaid in an equivalent amount; any benefit stipulated for the lender is riba.RibaAn increase over principal that Shariah prohibits: extra stipulated on a loan, or an unequal exchange of certain like-for-like goods.AAOIFI Financial Accounting Standards (FAS)The accounting standards AAOIFI issues for Islamic financial institutions, covering contract types and Islamic-specific reporting.