The Libyan Foreign Bank will offer Shariah-compliant products as the government prepares regulation to make Islamic banking the norm in the North African nation following the ousting of Moammar Gadhafi.
“Islamic products are being introduced and will predominate, but we will not relinquish the use of traditional banking,” general manager Mohammad Ben Yusef said in an interview Tuesday in Tripoli. “A decision will be made by the Central Bank of Libya by the end of March to introduce a new article in the banking law regarding Islamic governance.”
Shariah-compliant finance may reap the benefits of regime changes in North Africa, where protests last year toppled three leaders who persecuted Islamists. While Muslims make up about 95 percent of North Africa’s 220 million people according to the CIA World Factbook, access to Shariah-compliant financial services remains limited as past leaders, including Gadhafi, held back the industry’s growth to curb the influence of Islamic parties.
Mustafa Abdel Jalil, the chairman of the National Transitional Council that lead the rebellion to topple Gadhafi, said on Oct. 23 that the country’s banking industry should comply with Islamic law, which bans interest.
Central Bank Governor Saddek Omar Elkaber said the government will honor bank licenses issued during Gadhafi’s era, including one given to Qatar Islamic Bank to start the only Shariah-compliant lender in the country.
“We are a traditional society so we are looking for products that are ethically and morally comfortable; we think that Islamic banking can re-energize the industry and move our economy forward,” Ben Yusef said.
The Libyan Foreign Bank, owned by the central bank, is the biggest bank in Libya in terms of capital and assets, he said.