The Algerian Minister of Finance, Ayman Bin Abdel Rahman, announced the marketing of products for Islamic banking for the first time in government banks, starting in early August, after obtaining a legal fatwa.
This came, on Sunday, during an interview with the Minister of Finance Ayman bin Abdel Rahman with the Algerian state radio.
The minister revealed that two government banks have completed the procedures for obtaining the legal fatwa to match products with Islamic law, and they will be marketed in early August.
The matter concerns the National Bank of Algeria and the Agriculture and Rural Development Bank, according to the same official.
Regarding the rest of the banks, he made it clear that the details of their offers should be submitted to the Supreme Islamic Council (the highest advisory body in Algeria), which is empowered to issue a fatwa on the conformity of their products with the provisions of Islamic Sharia.
The Algerian government believes that the adoption of Islamic banking will enable it to attract an important part of the money traded in the parallel market and finance the economy, away from official channels.
Last March, the Algerian Central Bank authorized the marketing of banks operating in the domestic market for eight new Islamic banking products, as one of the tools to face the consequences of the oil shock.
It is related to marketing 8 Islamic banking products: Murabaha, Mudaraba, Musharaka, Ijara, Salam, Istisna’a, deposit accounts and investment deposits.
The Islamic financing formulas (without usurious interest) aim to contribute to the mobilization of savings, especially the injection of cash circulating outside the banks (the parallel market) into the official market.
The value of the parallel market in Algeria is estimated at more than 40 billion dollars, according to official data, while observers see the number exceeding 60 billion dollars.
Since 2014, government efforts to market Islamic banking products have failed, and they remain restricted to limited transactions.
There are 30 banking institutions in the country, of which 7 are public (government), more than 20 foreign banks from the Gulf countries in particular, and one French, one British and one Spanish.