Bank Negara issues Exposure Draft on Hajah and Darurah

On 15 December 2022, Bank Negara Malaysia (‘BNM’) issued an exposure draft of the policy document on Hajah and Darurah (‘proposed policy document’) 

The policy document, when issued, will apply to:
  • licensed Islamic banks;
  • licensed takaful operators and professional retakaful operators;
  • licensed banks and licensed investment banks approved to carry on Islamic banking business; and
  • prescribed development financial institutions approved to carry on Islamic financial business,
(collectively ‘IFIs’).
In essence, the proposed policy document sets out BNM’s proposed Shariah and operational requirements and expectations for the application of hajah (need) and darurah (dire necessity) by IFIs in carrying out Islamic banking and takaful business.1
The policy document, sets out the Shariah and operational requirements and expectations of BNM concerning the application of hajah and darurah. Among others, the policy document:
  • outlines the parameters of hajah and darurah for the application of exceptional rules;
  • clarifies and strengthens the accountability of individuals responsible for the assessment, deduction as well as implementation of hajah and darurah; and
  • outlines the operational requirements and guidance in facilitating Shariah deliberation and decision-making on the application of hajah and darurah.
The policy document will come into effect six months after the date of its issuance.
The deadline for submitting written feedback to BNM on the proposed policy document is 23 February 2023.
The policy document introduces hajah and darurah from the fiqhiyyah2 perspective and when issued will be welcomed as it provides clarity and guidance to IFIs in determining the circumstances in which hajah and darurah can be applied in Islamic financial business in accordance with Shariah.
Alert by Sharifah Shafika Alsagoff (Partner) and Hafidah Aman Hashim (Partner) of the Islamic Finance Practice of Skrine.  

1 Refer to section 1 and Appendix 1 of the proposed policy document for a discussion on the terms ‘hajah’ and ‘darurah’.
2 Fiqhiyyah means a circumstance faced by a scholar where it requires a new deduction of a Shariah requirement on the application of hajah and darurah, and its permissibility of the period and quantum will be determined based on the severity of hardships faced by the people.

This alert contains general information only. It does not constitute legal advice nor an expression of legal opinion and should not be relied upon as such. For further information, kindly contact