Morocco paves way for Islamic finance industry

The central bank said it was allowing five common types of transaction: Murabaha, Musharaka, Ijara, Mudaraba and Salam. (Reuters)
Updated 06 March 2017
0

Morocco paves way for Islamic finance industry

RABAT: Morocco’s central bank has approved the use of five types of Islamic banking transaction, giving a final regulatory nod for the country to launch an Islamic finance industry.
Islamic banks and insurers are setting up in Morocco after new legislation allowed them into the market, and the central bank has set up a central Shariah board, a body of Islamic scholars, to oversee the sector.
The North African country long rejected Islamic banking because of concern about Islamist movements, but its financial markets lack liquidity and foreign investors, and Islamic finance could attract both of those.
In circulars published in the official bulletin over the weekend, Morocco’s central bank said any Islamic transaction would be subject to preliminary approval by the Shariah board, called the Shariah Committee for Participative Finance (SCPC).
The central bank said it was allowing five common types of transaction: Murabaha, Musharaka, Ijara, Mudaraba and Salam. It also set regulations for conventional banks to open windows selling Islamic products.
It had given regulatory approval to three major Moroccan banks to open Islamic subsidiaries: Attijariwafa Bank, BMCE of Africa and Banque Centrale Populaire, as well as to smaller lenders Credit Agricole and Credit Immobilier et Hotelier.
Subsidiaries of Societe Generale of France, Credit du Maroc and BMCI have also won permission to sell Islamic products.
The circulars lay down conditions and regulatory frameworks for banks to manage deposits, funds and investments under Shariah principles, which ban interest and pure monetary speculation.
Morocco’s government plans to issue its first Islamic bond in the domestic market in the first half of 2017; experts said that would stimulate business in the sector. However, the Parliament has yet to approve a bill regulating Islamic insurance.


India oil minister says considering steps to keep fuel prices in check

Updated 22 min 35 sec ago
0

India oil minister says considering steps to keep fuel prices in check

NEW DELHI: India is looking at ways to keep rising fuel prices in check, its oil minister said on Monday, with retail rates for diesel and petrol touching record highs in capital city New Delhi and financial hub Mumbai.
Prices at the pump have surged on the back of rallying international markets for crude oil, which last week hit their strongest since late-2014 amid ongoing production cuts led by the Organization of the Petroleum Exporting Countries (OPEC).
“Various alternatives are being looked at,” Dharmendra Pradhan said in a televised speech, adding that he would “work out something soon.” He did not give details.
Opposition leaders have criticized the government for failing to rein in rising fuel prices, a politically-sensitive issue in one of the world’s biggest economies.
India is particularly at risk from stronger global prices for crude oil as it is the No.3 importer of the commodity, buying about 80 percent of its oil needs.
On Monday, industry lobby group FICCI called for an immediate cut in the excise duty on oil imports.
The cost of the growing thirst for oil around Asia will surpass $1 trillion this year, about twice as much as in 2015 and 2016, as oil prices touch $80 per barrel and continental demand hits a record.