Question Summary:
Halifax Current Reward Account

Question Detail:

Assalamu alaykum wwb respected ulama,
 
1) I had a question about an incentive to open an account and whether it was shariah compliant.
There is an offer for £125 if a current account is switched.  Further for every month that £750 is deposited into the account and 2 direct debit payments are made an additional payment for £5 for that month is made.  The payments are labelled as cashback and reward but I wanted to check if this is permissible?
More details can be found at:
http://www.halifax.co.uk/bankaccounts/current-accounts/reward-current-account/
 
2) My second question was regarding a pension scheme and whether it was pemissible.  It is something called a People's Pension where some money is deducted by my employer from my salary and they make a contribution as well.  I have set my contributions to use an ethical fund (they stated it was Shariah Compliant, but I guess that is just in terms of where they invest the money rather than the scheme itself)
Further details can be found at:
http://thepeoplespension.co.uk/
https://myproducts.bandce.co.uk/Home/ForcePDFDownload?pdfLink=Downloads%5CTPP%5CTPP%20-%20Fund%20Fact%20Sheet%20Ethical.pdf
 
Jazak'Allah khairan and wasalaam wwb.

Answer :

In the Name of Allah, the Most Gracious, the Most Merciful.
As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh
1. We understand that the Halifax Current Reward Account offers a monetary reward for opening a facility with the bank. Furthermore the bank provides cashback rewards for specific deposits.
 
The bank’s depositors are termed as the creditors while the bank is the debtor. The monetary reward and additional cashback rewards are impermissible since any access in exchange of the original credit amount is impermissible and termed as Riba (interest).
 
2. We have browsed through the website of “The People’s Pension”. Kindly submit the following information in order for us to issue a specific ruling:
1. Shariah Flow of Funds
2. Terms and Conditions
3. Shariah Screening Method
4. Debt/equity ratio
5. Target Companies (TC)
 
And Allah Ta’āla Knows Best
 
Ismail Desai,
Darul Iftaa