Law of Necessity (Darurah) Versus Halal Alternative in Islamic Banking and Finance

Darurah is defined as a situation that entails fear for loss of one’s life, affliction with grave bodily injury, or loss of property and honor with a degree of certainty that arises from one’s knowledge of the situation such that it leaves the victim with no choice for an alternative.

In the absence of Islamic banks or Islamic banking window in cases of true and urgent need to fulfill fundamental necessities we have seen:

1. Islamic Institutions like masjid, madrasa/school, charitable organizations, whose main purpose is to spread the word of Allah (SWT) deposit funds with interest based bank which uses same deposits by extending interest based loans and fund unlawful businesses.
2. Likewise, corporates that are Muslim owned and Muslim individuals deposit funds and access interest-based loans.

It should also be mentioned that necessity in Islamic commercial law poses many questions. Among these is to what extent someone can violate settled rulings under the pretext of darura to avoid abuse of the law.

At the same time Muslims should be aware that the law of necessity cannot be used in the presence of halal alternatives.

In Malawi Muslims have been using interest-based banks for a very long time due to the absence of Islamic banks unlike Muslims in Tanzania, Kenya, Burundi and many more other countries where Islamic banking systems whether through fully fledged facility or through Islamic banking window have been operating for a very long time.

Now that we have Islamic banking window system in place in one of the banks, using law of necessity will be deemed as deliberate abuse of the law to suit our personal interest and be mindful that only Allah (SWT) knows our intentions.

Some are reluctant to change and are comfortable transacting with interest based banks claiming that as long as they do not use interest received into their accounts, it is fine with them. However, one thing they forget is that they have no control over their deposits, and interest-based banks use them by lending on interest and funding unlawful businesses therefore, becoming silent funders of such business activities. This can be avoided by transacting with either fully fledged bank or Islamic banking window since Shariah Board oversees shariah compliance in Islamic banking window and fully fledged Islamic bank.