The growth of Islamic banking in Africa has not grown as fast as expected due to concerns about Islamist movements. This is changing, as more countries across the continent are opening up and giving regulatory support to exploit the benefits. It started with interest from sovereign states in issuing sukuk. Now, Morocco’s central bank has given a final regulatory approval for the launch of an Islamic finance industry in the country, with the hope of boosting liquidity in its financial markets and attracting foreign investors.
Islamic banks and insurance companies are setting up in Morocco after new legislation opened the doors to the Moroccan market. The country’s central bank had since set up a central sharia board, called the Sharia Committee for Participative Finance, to oversee the sector.
The apex bank has approved the use of five types of Islamic banking transaction: murabaha, musharaka, ijara, mudaraba and salam. However, all would be subject to preliminary approval by the sharia board. The Bank has also granted approval for three major Moroccan banks and two smaller lenders to open Islamic subsidiaries. The central bank has also approved that subsidiaries of Societe Generale of France, Credit du Maroc and BMCI could sell Islamic products.
According to Reuters, circulars published in the official bulletin by Morocco’s central bank lay down conditions and regulatory frameworks banks should follow in managing deposits, funds and investments under sharia principles, which is against interest and pure monetary speculation.