By Loubna Flah,
By Loubna Flah,
Morocco World News
Casablanca, August 21, 2012
Four Islamic banks from Kuwait, Bahrain, Qatar and Saudi Arabia submitted their application to the governor of Bank al Maghrib, Morocco’s central bank, to operate in the Moroccan banking sector.
According to the Moroccan daily Akhbar al Yawm, the government is drafting a law that would facilitate the use of Islamic finance in the country. Some national banks have already been allowed to offer Islamic banking packages but not a single Islamic bank has opened officially in Morocco.
The new regulations are expected to allow foreign Islamic banks to invest in the Moroccan financial market. This unprecedented initiative has inspired some national banks to bid for the Islamic products as well.
The banks that submitted their request to the central bank are: The Bahraini bank “Al-Baraka”, the Kuwaiti Bank for Investment, Qatar National Bank and Faisal Islamic Bank.
The newly drafted regulations aim at giving a legal framework to foreign banks operating in Morocco. Foreign Islamic banks are required to set partnerships with local banks. The new law does not allow, however, the foreign banks to set up their own branches.
Mr. Najib Boulif, minister of governance and general affairs pinpoints that “there are many applications under examination by the governor of Bank al Maghrib.”
The new bill is almost finalized and will be submitted to the parliament for consideration. The new banks will not explicitly bear the Islamic label. They will be named as “the Cooperative banks” and their products the “Alternative products”.
These new financial institutions will be monitored by a Sharia committee. Religious scholars will be entrusted with assessing the compliance of the services and products offered with the concept of Islamic finance provisioned in the Sharia Law.
This ingenious step is undertaken by Morocco to prevent any illicit transaction, especially that Islamic banking remains a new field of research both for economists and Muslim scholars.
In Gulf countries where Islamic banks have become strong financial institutions, banks form their own Sharia committees.
Najib Boulif describes Morocco as a promising investing environment liable to attract more than 20 billion dollars from the Gulf countries.
Attijari Wafabank was the first Moroccan bank to adopt Islamic products. It has opened a separate branch called “Dar Assafae” devoted only to interest-free products. The other national banks were rather skeptical about the cost-effectiveness of this new trend in banking.
The major difference between conventional banks and Islamic banks besides the divergence on the concept of “interest” pertains to the type of relation established with the client.
In conventional banking, the relation between the bank and the client is that of creditor and debtor, whereas in Islamic banking the relation is that of partners, investors and trader, buyer and seller.
To dodge the elicit aspect of interest and to ensure their viability on the financial market, Islamic banks offer a number of Sharia compliant products.
Islamic banks adopt several modes of acquiring assets and financing projects including consumer finance.
There are four products derived from Islamic commercial law offered by Islamic banks: Mudarabah, Musharakah, Murabahah and Ijarah.
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