Islamic Banking in Algeria:

Legal Evolution and Strategic Reform under the Monetary and Banking Act 2023

Badreddine Berrahlia

 

Abstract: This paper investigates issues related to Islamic banking and examines the provisions of the Monetary and Banking Act 2023 (the Act). The study employs an empirical policy analysis to evaluate the establishment of Islamic banks and Islamic Financial Institutions (IFIs) in Algeria, their operations and contracts, as well as their supervision mechanisms. The research argues that the Act constitutes a qualitative shift in enhancing Islamic banking activities. However, to ensure more stability within the Islamic financial industry in Algeria, several challenges have been raised. Accordingly, the study highlights concerns and reservations regarding the barriers imposed on partnership contracts, the delays in establishing appropriate monetary intervention tools, and the regulatory gap in aligning taxation treatment with Islamic banking activities. Finally, the research offers several recommendations, including strengthening the Shari’ah governance structure, establishing investment depositor associations, and systemising Islamic finance dispute resolution.