Regional banks are looking to capitalise on Morocco’s plans to introduce Islamic banking (also known as participation banking) services in the country. Morocco’s central bank, Bank Al Maghrib, is developing the regulatory framework for the industry to be ready by 2016.
For all the sectarian violence gripping Iraq, Shari’ah-compliant banks operating in the nation see opportunities for growth.
Elaf Islamic Bank, the 14-year-old Baghdad-based lender, is targeting 28 per cent increase in profit this year, even as rival Cihan Bank said its income dropped last year as militants seized vast swathes of the country. Iraq’s cabinet approved a draft law yesterday regulating the Shari’ah-compliant banking industry, which will now move to the country’s parliament for passage.
Investors from the UAE and Bahrain have applied for a licence to establish an Islamic bank in Iraq with a paid up capital of $240 million.
"We have applied to the Central Bank of Iraq and expect the approval to be given within six months," Abdulsalam M. Juwaied, Vice President of the Iraqi Islamic Bank for Investment and Development, told Zawya.
Iraq has approved the construction of a government Islamic bank with capital reaching 250 billion dinars (about $214 million). The new bank will be under the supervision of the Central Bank of Iraq and will be administratively linked to the Finance Ministry. An Iraqi official confirmed that the Islamic bank will work to attract significant capital and will contribute to the process of integrating governmental and private banks. The Iraqi government also decided to allow the operation of Windows in governmental banks.