News

Morocco is to create a sharia board of Islamic scholars to oversee the country's fledgling Islamic finance industry, according to a royal decree.

It is the second big step to allow the creation of Islamic banks and enable private firms to issue Islamic debt, after parliament approved the Islamic finance bill last November.

Islamic banks, which ban interest payments and pure monetary trading, have been growing across Asia, Middle East and Europe.

Sensitive of Islamist movements, Morocco has long rejected the idea. But the country's financial market lacks liquidity and foreign investors, and Islamic finance could attract both.

Called the Sharia Committee for Participative Finances, the board will be composed of 10 Islamic scholars plus at least five financial experts, the official bulletin said.

The members of the committee will be named by the president of the country’s Islamic Scholars Council, the bulletin said.

The board will approve the conformity of the Islamic products proposed by the participative banks, as they will be known under the legislation, and insurance (takaful) to sharia law.

It will also oversee the central bank decisions regarding the participative finances sector.

Major Moroccan banks have been preparing to open Islamic offshoots since the legislative process began. Foreign lenders have been also testing the waters.

Published in Alarabiya.net | Feb 18, 2015