Title: Bank Al-Maghrib’s Role in Ensuring Compliance and Stability in Morocco’s Financial Sector
Morocco’s Central Bank: Bank Al-Maghrib
Bank Al-Maghrib, the central bank of Morocco, plays a crucial role in supervising the kingdom’s banking sector. In an interview, a senior official from the bank shed light on the importance of effective banking supervision for maintaining public trust and financial stability.
The Banking Sector under Bank Al-Maghrib’s Jurisdiction
With all Moroccan credit institutions, including banks, finance companies, offshore banks, microcredit associations, payment institutions, Deposit and Management Fund, and Central Guarantee Fund, falling under its jurisdiction, Bank Al-Maghrib’s primary mission is to ensure compliance with accounting and prudential rules, conduct both on-site and off-site inspections, and address any issues these institutions might encounter.
Expanded Powers and Independence
In December 2014, Morocco’s Law No. 103-12 on credit institutions and similar bodies was issued, granting Bank Al-Maghrib enhanced independence and expanded powers. Bank Al-Maghrib now licenses and supervises microcredit associations and offshore banks while being responsible for regulating their activities and dealing with potential issues.
Participatory Banks
An entire chapter in the new Banking Law is dedicated to participatory banks, which operate under the same licensing and supervision procedures as conventional banks. However, modifications are made to align with the unique aspects of Sharia law.
Compliance with Sharia Law
To prevent any risk of non-compliance with the opinions of the Supreme Council of Ulama (a function of Islamic scholars), Bank Al-Maghrib has established a function to identify and address potential risks in this regard. The official reiterated the importance of ensuring that participatory banks strictly comply with fundamental principles and operate within their defined scope.
Strengthening the Financial System
The increased responsibilities and scope of Bank Al-Maghrib’s roles reflect the Moroccan government’s commitment to strengthening the financial sector’s foundations. This commitment fosters a more stable and efficient Moroccan financial system.
- Enhanced independence for Bank Al-Maghrib under Law No. 103-12
- Licensing and supervision of microcredit associations and offshore banks
- Regulation and addressing issues for microcredit associations and offshore banks
- Specialized chapter in the new Banking Law for participatory banks
- Modifications to conventional banking procedures for participatory banks to align with Sharia law
- Identifying and addressing risks to ensure compliance with Sharia law
- Stronger financial sector foundations and increased stability and efficiency in the Moroccan financial system.