By Siham Ali for Magharebia in Rabat
Islamic banks may soon gain a foothold in Morocco. The move has been expected since the Justice and Development Party (PJD), advocates of Islamic finance, came to power.
The parliament is set to vote on the new draft banking law in September. The bill will include a special chapter dealing with Islamic banking, according to Central Bank Governor Abdellatif Jouahri.
The central bank has already received two foreign requests for permission to invest in the sector. The applications will be studied after the law is passed.
A day after Abdelilah Benkirane was officially appointed as prime minister by the king, he hosted the leader of Qatar’s international Islamic bank. The head of government received proposals for two schemes: an Islamic bank and an Islamic insurance company.
Once the banks are set up, a national committee of ulemas will be created with the purpose of ensuring that bank transactions are conducted in line with the laws of Islam.
Under the concept of Islamic finance, loans cannot be a source of profit, and interest charges are banned. Lending cannot be used as a form of commerce. Money can be used as capital funding to support commerce but cannot be the object of commerce. The finance awarded by the bank therefore implies that the bank itself will share in both the profits and the losses.
The minister delegate responsible for the budget, Driss Azami El Idrissi of the PJD, appears optimistic. He stressed that Islamic banks have managed to inject financial dynamism into the countries where they are established.
According to economist Mohamed Cherrafi, Islamic banking can be a good alternative, provided that a certain amount of fiscal neutrality is ensured and double taxation removed.
Islamic finance has a promising future, given that the total amount of money circulating in the sector worldwide was estimated to reach around a trillion dollars last year, he said, which was 50% higher than in 2008 and 21% higher than in 2010.
The introduction of Islamic banking will encourage saving and increase the proportion of the population with bank accounts, according to sociologist Samira Kassimi.
“It’s time to set up financial tools to meet the needs of all Moroccans,” she said. “We have to instil a new spirit of economic competition which fits both their culture and religion.”
While some people don’t see the value of setting up Islamic banks, others are anxious to see them open.
Religion should not be used as the basis when considering banking products, opined managerial assistant Souad Bourji. The world has moved on, and the public must choose the products most suited to them, be they Islamic or traditional, she said.
Teacher Rabiae Chennaoui, who has been following developments in Islamic finance in Morocco for years, holds a different opinion. “My religious convictions do not allow me to take out a loan. And the alternative products being offered by the banks are too expensive. I’m waiting for Islamic banks to be set up so that I can put my plans into action,” he said.
This content was commissioned for Magharebia.com.