Government Assigns The Supreme Islamic Council To Issue Fatwas To Banks

Government assigned the Islamic Supreme Council to issue a fatwa to the banks in the file of Islamic services and financing, which are expected to be adopted soon, after the issuance of the special legal regulation of Algeria Bank within days, at the time 4 banks, including 3 public and private 18 deposited applications that are placed at the table of Algeria Bank’s governor, Mohammed Loukal, to inaugurate this new method of financing in Algeria.

On Wednesday, the Governor of Algeria Bank, Mohamed Loukal, revealed that four banks, three of them are public and one private, had filed their applications for benefiting from the Islamic Financial Services (IFS) license in Algeria, in order to generalize the new financing tools, which will be adopted by banks following the amendment of the Loan and Monetary Law recently, to overcome the problems that are associated with interest incomes.

For his part, the chairman of the Professional Association of Financial Institutions and Banks, Boualam Djabbar, said that the Islamic Financial Services existed in Algeria for decades, and it concerns the Al Baraka and Al Salam Banks, while they will be launched at the level of service and commercial banks soon, without announcing on the official date.

“These banks will contribute to the banking economy and bringing citizens to banks and inject financial liquidity, and it amounts to the aspirations of citizens who have long called for the adoption of this alternative method of financing, while the advisory opinion will be sponsored by other bodies, and the regulatory procedures will be supervised by Algeria Bank to be passed through the regulatory law that will be issued soon”.

“The Islamic Finance Services are optional at the bank level and are not mandatory but will be present through most banks, as the Bank of Agriculture and Rural Development, the Local Development Bank, the National Saving and Foresight Fund (CNEP) and a special bank will apply for the license to Algeria Bank, and this will be decided soon”.

On the other hand, the financing of Al Baraka and Al Salam banks is equivalent to DZD 200 billion, which is equivalent to 3% of the bank funds and 17% of private banks.

The Director of Loans at the level of Algeria Bank, Mohamed Kobbi, said that 29 financial institutions that are active in the national market, including 20 banks, will grant 15 electronic payment license since 2016, 16 licenses for e-commerce, 17 licenses to pay taxes electronically, 5 licenses for Internet banking, and 4 licenses for mobile banking with a total of 60 licenses.

For his part, the Chairman of the Fatwa Committee at the level of the Supreme Islamic Council, Kamal Bouzidi, announced the preparation for the signing of an agreement between the Islamic Council and the Professional Association of Banks and Financial Institutions, as the Council will form a Fatwa Committee to decide about the requests of banks and fatwas on their legitimacy, so that the Islamic financial services will be conform to the provisions of the law without recording any ambiguity or controversy in the file.