IslamicFinance.de

The Libyan Stock Market has signed a multi-faceted memorandum of understanding (MoU) with global Shariah advisory firm, Amanie Advisors, to help Libya’s efforts to expand the role of Islamic finance in its economy. The comprehensive MoU sets out a clear roadmap for research into the areas of growth for Islamic Finance within Libya, Islamic Finance training and a joint agreement on conducting market research that aims to devise the proper development model for Islamic Finance with Libya. Amanie will also provide Shariah consultancy services to the relevant authority with respect to drafting relevant guidelines and regulations for their major Islamic capital markets initiative. With training a key challenge for Islamic banks, Amanie will provide in-depth guidance and training to the relevant agencies within Libya.

Qatar-based bank Masraf Al Rayan is in the final stages of due diligence to acquire a stake in a Libyan lender. According to the group chief executive Adel Mustafawi, after preparing the required studies, a memorandum of understanding will be signed before proceeding to secure the required approvals from the authorities in both Qatar and Libya. Shareholders of Rayan had approved in February its plan to buy a stake in a Libyan lender, while also voting to give the board of directors control over a QR1bn ($275mn) war chest to make acquisitions over the next two years. Moreover, the bank has also made significant progress in fulfilling the requirements of acquiring a stake in Islamic Bank of Britain.

Masraf Al Rayan got the approval by its extra ordinary general assembly to acquire an important share in a commercial bank in Libya. It now needs the nod of the Qatari and Libyan authorities before it can be a reality. The acquisition of the anonymous Libyan bank is part of the Masraf Al Rayan’s plan to pursue diverse investment opportunities. According to director Dr Hussain Ali al-Abdulla of Al Rayan, the Libyan bank is poised to be converted into an Islamic bank. Moreover, Masraf Al Rayan continues its efforts to acquire a large share in Islamic Bank of Britain.

The Libyan General National Congress (GNC) looks to amend regulations of the financial services sector and to introduce Islamic financing into Libya for the first time. Currently there are a number of discrepancies between a new law about Islamic finance and some of the existing supervisory legislation. This has resulted in confusion that is likely to put a brake on the development of this sector, as investment companies will not be willing to develop new products. Clear common objectives, separation of powers and clarity of written rules and regulations are necessary to raise the competitiveness of Lybia's domestic banking markets, develop new Shariah-compliant financing products and provide a secure approach to the growing needs of the Libyan customers.