Algeria: Projected Expansion of Islamic Transactions to all Public Banks

The Ministry of Finance has decided to extend Islamic banking operations to include all public banks after being limited to three public and private banks namely Al Baraka Bank, National Bank of Algeria, and the National Fund for supply and providence as part of newly-devised Islamic-oriented banking procedures aimed at further boosting this vital sector of financial activity.

Upon being apprised of the Ministerial injunction, various banking institutions in the country have called for the contribution of experts and specialists some of them from foreign countries to extend their know-how and expertise to their respective staff in the smooth running of these Islamic banking operations and transactions for the benefit of the Algerian customers.

The Agriculture and Rural Development Bank “Badr” will also engage in the field of Islamic transactions soon according to a reliable source from the National Association of banks.

The latter also revealed that all public banks are required to opt for Islamic transactions with the advent of the holy month of Ramadan next June, by making available within their premises a special desk to this effect, in order to attract the largest segments of those Algerian practicing Muslims who, by virtue of their faith,  utterly shun traditional banking operations due to the usual  usury practices.

The initiative comes as part of the Government’s ongoing campaign to bring Algerians’ money to the banks, in view of the financial crisis now besetting in Algeria, notably after the issuing of an assessment report on the matter, which stated that over 60 percent of Algerian funds are traded outside the banking channels, especially for wholesalers and informal traders who prefer to hoard their money under wraps at home rather than storing it in the banks.