RABAT, Morocco _ Morocco has become the latest Muslim-majority country to authorize Islamic banks, amid growing market demand for Sharia-compliant banking.
The Moroccan central bank announced this week it has approved five such banks, fulfilling a long-standing promise of the Islamist party leading a coalition government since 2011.
Among them are leading national banks Attijariwafa, linked to the royal family, state-owned Banque Centrale Populaire and private BMCE Bank of Africa. All three hold increasing assets around French-speaking Africa. The others are CIH Bank and Credit Agricole du Maroc.
Four of the five will be partnerships between Moroccan banks and Islamic financial institutions in the Gulf, according to a statement from the central bank.
The approval of Islamic banks was long awaited by the market and the political scene.
Morocco had been reticent about Islamic finance, seeing it as politically sensitive, but now sees it as a growth prospect. The Islamist PJD party had made the opening of Islamic banks one of its campaign promises in 2011, when it won parliamentary elections.
The regulatory framework was updated in 2015 with a law authorizing independent Islamic institutions labeled “participative banks.” A board was created within Morocco’s Supreme Council of Islamic Scholars to rule on the conformity of financial products to Sharia, or Islamic law. Sharia forbids interest, which is key to most banks’ operations.
The central bank also allowed the subsidiaries of three leading French banks to sell Islamic products in Morocco: Societe Generale, BNP Paribas and Credit Agricole.