The Algerian government’s recent push for Islamic finance and banking in a bid to diversify and protect its economy is paying off; the country now has three Islamic windows run by commercial banks with the latest entry from the Algerian subsidiary of Bahrain’s Bank ABC. NESSREEN TAMANO writes.
The new Islamic banking window was launched under the brand name ‘alburaq’ by Bank ABC Algeria as the first private-sector bank in the country to receive full regulatory approval to run an Islamic window, and serves both the corporate and retail segments.
In its initial phase, alburaq will offer 14 corporate and retail products, overseen by the bank’s newly formed Shariah supervisory board. Two additional windows in the bank’s Setif and Hassi Messaoud branches are scheduled to launch later this year.
“This is an exciting time for us and for the Algerian market. Islamic banking is gaining traction globally and there is a growing appetite in Algeria for Shariah compliant banking services,” said Nadir Idir, CEO of the bank.
Bank ABC Algeria closely follows Banque Nationale d’Algerie, which became the first state-owned bank to launch its Islamic window in August 2020, and Credit Populaire d’Algerie, which launched nine Islamic products at its Val d’Hydra branch in October 2020, later made available throughout its national network. The central bank had, earlier that year, established the Higher Islamic Council, which had given its approval for the three banks to launch their Islamic windows. At least two other state-owned banks are expected to follow suit this year.
There are only two fully-fledged Islamic banks operating in the North African nation: the Bahrain-owned Banque Al Baraka D’Algerie and the UAE-owned Al Salam Bank Algeria. Official Islamic banking regulations were only recently published — in March 2020 — to define the operations and activities of banks offering Shariah products.
The Islamic banking sector is set to spur the country’s nascent Takaful industry, as Islamic insurance operators are expected to prioritize bancaTakaful products to support Islamic banks and windows in Algeria.