Personal Finance Question: Reward schemes for making an account with a bank

Everyday Islamic Finance Personal and Family Finance
#1

Assalamu Alaikum.

There are some banks out there which offer new customers money if they set up an account with said bank, they may also offer monetary rewards for any new customers who join the bank using your referral code, is this money permissible?

An example of this is “Monese” which is a new company similar to “Revolut” and “Monzo” and are aimed at people who travel and use their cards abroad. They offer these aforementioned monetary rewards to new customers, but the new customer must top up their account first (min of £10), then order their bank card (costs £5 but this is apparently for delivery) and then use that card once - when they get it - in order to receive the monetary reward. Each person you successfully recommend also needs to complete the steps above in order for you both to receive your £10 reward.

Long winded, but an answer would be much appreciated.

Jazaakumullaah khairan
Wassalaamu Alaikum

#2

Wasalam

May Allah bless you.

  1. If the reward or benefit is given on the condition of opening up a bank account, then it’s not permissible to accept it. This is due to the nature of the banker-customer relationship. In theory, a customer’s deposit represents a loan given to the bank. Therefore the reward offered is in exchange of the loan provided to the bank. This reward equals to riba which is haram in Islam.
    For a person to accept a reward or a gift from a bank, it must not be linked to the opening of the account, neither it must be linked to the amount of deposit made on the account, and it must not be part of a feature of a certain account i.e. paying for a premium account which gives you certain benefits.

  2. In regards to reward received as part of a referral, it is permissible for the referee to accept the reward. However the referred customer cannot accept the reward if it’s being shared with them.

  3. In regards to rewards linked to the usage of the cards only, it is permissible to accept them. For example reward received through the Revolut Perks. Their reward is based on the amount of times the customer uses the Revolut card.

And Allah knows best!

Personal Finance Question: Insurance benefits bundled with paid current account
#4

N.B.

Theoretically, I could use the card for a £1 purchase then transfer the remaining balance in the account to another account I have and I’d still receive the referral reward.
I could then limitlessly refer others and receive referral rewards without ever using the bank again (i.e. leave the account empty and transfer any reward amounts to other bank accounts that I use more regularly)
Does that change anything re the ruling for either @Mufti_Billal or @Mufti_Faraz_Adam

#6

For the person making the referrals, the reward received in exchange is permissible. So based on the scenario you have mentioned above, you can receive the reward everytime you are assisting someone in opening up an account.
However, there is another scenario: sometimes the one who is being referred can also share into the reward scheme upon opening up the bank account. My opinion is that for her the reward is not permissible. This is because the reward received here was connected to the opening of the bank. As I have mentioned above, any reward received in exchange of opening an account is not permissible.

And Allah knows best!

#7

Assalaamu alaykum,

I don’t currently have a view on this and will need to think further.