RABAT: The first house of Morocco's parliament approved a bill to allow the establishment of Islamic banks and enable private companies to issue Islamic debt yesterday after months of delays.
The bill still needs to be passed in a final vote in the second house in the coming weeks.
Morocco has been seeking to develop Islamic finance for about two years, partly as a way to attract Gulf money and fund a huge budget deficit. But the sensitivity of the Moroccan political elite to Islamism has repeatedly delayed the plans.
Legislators in the first house voted unanimously in favour of the law yesterday.
"The bill has passed (in the first house) by 75 votes and no one was against it," Said Khairoune, the head of parliament's economics and finance committee, told Reuters.
The bill will allow foreign banks as well as local lenders to set up Islamic banks in Morocco.
The central bank has started to set up a central sharia board with the country's body of Islamic scholars to oversee the Islamic finance sector.
Seven scholars and financial experts have started training to become members of the board.
The political momentum behind Islamic finance has increased since a moderate Islamist-led government took power through elections in late 2011.
Moroccan financial markets suffer from a lack of liquidity and foreign investors and sukuk issues could attract money from wealthy Islamic funds in the Gulf.
Last year, Morocco approved legislation allowing the government to issue sovereign sukuk, although it has yet to do so.
A Thomson Reuters study of Morocco, released in April, estimated Islamic banks could account for between three and five per cent of the country's total banking assets by 2018, or about $5.2 billion-8.6bn. Islamic banks will be called participative banks under the Moroccan legislation.
(Gulf Daily News / 26 June 2014)---
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