Hibah

Hibah (Arabic: هبة, literally 'gift') is a voluntary, unconditional transfer of ownership of property from a donor (Wahib) to a recipient (Mawhub Lah) without any consideration or expectation of return. It is distinguished from Sadaqah (charity) by its secular motivation — Hibah can be given to anyone, Muslim or non-Muslim, for any reason. In Islamic banking, Hibah plays a critical role as the mechanism for banks to reward customers who hold Wadiah (safekeeping) or Qard (loan) accounts: since these are technically deposits of trust or loans to the bank, the bank cannot contractually promise any return. Instead, banks discretionally award Hibah — a gift — on these accounts to remain competitive with conventional savings interest. This structure maintains Shariah compliance while providing customers with de facto returns. Hibah is also used in Islamic insurance (Takaful surplus distribution) and in family estate planning as an alternative to conventional inheritance for specific assets.