Algeria: Loans and Islamic funds in national banks guided by government

Algerian Finance Minister Karim Djoudi revealed on the installation of working groups comprising experts and national banks’ officials, public and private, a comprehensive study being prepared to get new proposals on the adoption of banking services that are compatible with the Islamic Sharia in these banks. That would be by opening special branches or posts interested in the Islamic banking services.

• He added that the citizens or economic partners can benefit from the advantages offered by these various banking institutions and participate in addition to funding through cooperative savings and loans without interests or leases and Islamic checks.
• Djoudi said few weeks ago that the government could not impose adopting Islamic services, which are related to the trade policy circulation on banks, every bank considered appropriate to it. Yet, he returned last weekend to the supreme chamber to show more reception to Islamic parliamentarians. He said that the working group newly engaged in the framework of the general banks and financial institutions is expected to know more development in the future.
•  He added that the law on currency and loan provisions will regulate and control this type of products.
• He cited the presence of “Baraka” and “Essalam” banks, which deal with the Islamic Banking sector “evidence of the authorities’ encourages developing such banking products. Although many specialists saw similarities between this kind of traditional banks with their counterparts in terms of mobilizing savings and deploying them in developing the projects, there is a radical difference in the investment and funding process based on the Islamic banks’ principle which is participating in the investment process and the distribution of investment’s risks on all the sides.
• The system includes the work of Islamic banking services with fixed wages and commitment of not financing the operations that are forbidden in the Islamic Sharia such as, liquor, pork and others.
• The government believes now that opening of Islamic banks in the public ones would contribute in reducing important financial masses which are circulating in markets outside the banking economy and encouraging their investment. Many religious people refuse rejecting  them including big merchants, the government also hopes that this would contribute in attracting Algerian immigrants’ money wishing to transfer their money from foreign banks to others not forbidden in our religion, which was observed by western banks.
• French banks witnessed a marked shift recently after they decided to enter the activities of Islamic transactions both at the institutions and individuals’ levels. Two years ago, the British government said by its spokesman “Gordon Brown” finance minister in Tony Blair’s, “ they wanted to make from London “Western Gate” for Islamic banks and during 25 previous years Islamic banks reached a rate of 15 percent annually, then 360 bank foundation deployed in more than 90 countries in the world, which encouraged a large number of global conventional banks to open branches and windows in order to provide some Islamic banking services. This brought the size of their funds towards 300 billion dollars according to some studies.
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