ALGERIA: Algerian authorities are engaging UK institutions active in Islamic finance to leverage their experience and expertise in building an Islamic finance ecosystem amid work by the central bank in drafting a new Islamic finance framework, Abderrahmane Raouia, the minister of finance, told members of the People’s National Assembly.
Abderrahmane did not elaborate on the exact role of the UK institutions and did not name them in his answer to a member of the Lower House who asked why state-owned banks ceased offering Shariah compliant products recently since introducing the new product suite at the end of 2017 and early 2018.
“In order to answer the demand from citizens, the Central Bank of Algeria is currently developing a new regulatory framework on alternative financing or Islamic finance aiming at regulating the activity of Islamic windows established by state-owned banks,” Abderrahmane was quoted as saying by Algerie Presse Service.
The set of rules will clearly draw a line between conventional banking and Islamic windows in terms of accounting, governance, administration and prudential rules.
While Sukuk have been accommodated in the Financial Law 2018, a work group falling under the supervision of the minister of finance has also been set up to draft a bill for the development of Shariah compliant financial transactions, including through the issuance of sovereign Islamic securities. The bill will also tackle the inception of Takaful and re-Takaful operators.
Training human capital in the marketing and promotion of Islamic banking solutions is also a priority for state-owned banks, highlighted Abderrahmane.
Since October last year, when three government-owned banks were allowed to offer Islamic products, successive announcements have been made and a few projects have been launched including the establishment of a national Shariah board and the development of Sukuk structures by Bourse d’Algerie to support the growth of the industry.