Financial Crime World

MOROCCAN BANKING SECTOR GETS BOOST FROM COOLING-OFF PERIOD FOR CONSUMERS

The Moroccan banking sector has received a boost from a recent directive issued by Bank Al-Maghrib (BAM), mandating credit institutions to provide a seven-day cooling-off period for borrowers before issuing credit.

Protecting Consumers

According to the directive, credit institutions must grant a minimum of seven days for borrowers to reconsider their loan applications before committing to the agreement. This initiative is aimed at safeguarding consumers against potential financial losses and ensuring that they are fully aware of the terms and conditions of the loan.

  • The cooling-off period will apply to all credit facilities, including personal loans, mortgages, and other types of financing.
  • Borrowers will have the right to withdraw their application within the specified timeframe without incurring any penalties or costs.

Emphasis on Consumer Protection

The BAM has emphasized the importance of consumer protection in the banking sector, stating that “the provision of a cooling-off period is essential to ensure that borrowers are fully informed about the terms and conditions of the loan before committing to it.”

New Regulations and Initiatives

The Moroccan government has also announced plans to introduce new regulations aimed at promoting competition and transparency in the banking sector. These measures will include:

  • Increased monitoring of credit institutions
  • Stricter supervision of their activities
  • Encouragement of fintech companies to operate in Morocco, with a view to increasing competition in the banking sector and improving services for consumers

Key Statistics

  • Average solvency ratio: 15.5%
  • Average Tier 1 capital ratio: 11.4%
  • Liquidity cushion: 176%

The Moroccan banking sector is expected to continue its resilience in terms of solvency and liquidity, with credit institutions maintaining high levels of capital and liquidity.

In the near future, BAM will focus on transposing prudential rules from the Basel Committee to Moroccan credit institutions. Additionally, the development of a legislative framework to regulate fintech companies and other new players in the banking sector is expected to occur.

Cryptocurrencies and Fintech

Morocco does not currently have regulations governing cryptocurrencies, and there have been no legislative developments with respect to fintech in the country.

However, the Capital Markets Authority, BAM, and the Ministry of Economy and Finance recently issued a press release warning the public against the use of virtual currencies. The release highlighted the risks associated with investing in cryptocurrencies and emphasized the need for caution when dealing with such assets.