Rabat - Halal credits and Sharia compliant bank accounts are now available in Morocco as the Central Bank and the Ministry of Economy and Finance have authorized the opening of five Islamic banks, referred to as “participatory” banks, according to a press release published this Monday.
Rabat – Halal credits and Sharia compliant bank accounts are now available in Morocco as the Central Bank and the Ministry of Economy and Finance have authorized the opening of five Islamic banks, referred to as “participatory” banks, according to a press release published this Monday.
No authorizations had so far been granted to foreign banks by Bank Al-Maghrib.
Three conventional institutions will also be allowed to “offer their clients participatory banking products.”
According to the bank’s statement, the legislation has also been modified to allow the High Council of Ulemas, an official authority that aims to support the Islamic religious policy of Morocco, to host a “Sharia Committee for Participatory Finance.”
This committee will be the “only committee that is authorized to issue fatwas on the conformity of the products of the participative finance to the precepts of the moderate Islam,” adds the communiqué.
The central bank did not disclose the launch date of these halal banks in the kingdom, but according to the Mohamed Boussaid, the Minister of Economy and Finance, Morocco must issue the first Islamic financial titles, called sukuks, before mid-2017.
“These new financial tools should contribute to the development of the participatory banks,” Mohamed Boussaid told the MAP, adding that the opening of the 2nd Symposium on Islamic Economics and Finance will be , focused on the “development of long-term financing and Islamic capital markets.”
“These tools also provide alternative solutions for the financing of projects carried out by both the state and the private sector, through the issuance of participating bonds using the securitization vehicle,” the Minister continued.
A promising start
Some of the biggest Moroccan banking groups had filed applications for approval to launch “participatory” subsidiaries, often in association with Islamic banks in the Gulf countries.
Their enthusiasm can be explained by the potential of the sector. According to the American rating company Standard & Poor’s, quoted by Usine Nouvelle, Islamic finance could represent between 10 to 20% of Morocco’s banking system.
According to a recent survey carried out by Reuters, the Islamic Research and Training Institute attached to the Islamic Development Bank (IDB) and the consulting firm Zawya, 98% of Moroccans are interested in Islamic banking products. 43% said they would open bank accounts with Islamic institutions even if halal banking products proved to be more expensive than traditional banking services.
The launch of participatory banks has been delayed several times due to the complexity of the regulatory process. The arrival of these new players should, in any case, result in the opening of 150 to 200 agencies, according to La Vie Éco.