(TAP) – “Islamic banks aim to hold 15% of banking assets by 2022, compared to 6.5% in 2016, and this will help support the Tunisian economy and attract more foreign capital, “Mahdoudh Barouni, a financial expert in Islamic finance, said on Saturday.

Speaking at a panel discussion organised by the Tunisian Association of Islamic Finance on “the impact of legislation on the development of financial services in Tunisia”, he said Islamic banks are unable to reinvest the surplus of deposits, noting that Law No. 48 of the year 2016 adopted in July 2016 will allow the local Islamic banks (Al Baraka, Zitouna Bank and El Wifak) and foreign banks wishing to invest in Tunisia to find windows specialised in Islamic Finance.

Barouni also added that control mechanisms will be put in place as soon as the legislative and procedural texts governing the Islamic finance sector are finalised, stating that these mechanisms are aimed at supporting employment and development in the country and encouraging migration from the informal to the formal sector, therefore reducing the margins of the informal economy.

For his part, president of the Tunisian Association of Islamic Finance Amel Amri, called on the authorities to put in place a legislative text to ensure fair competition between Islamic banks and conventional ones.

She also pointed out that “Islamic banks’ commitment to the application of Shari’a principles has undermined the interest of their clients, since they are not concerned, for example, by the first housing programme, decided by the government, since these banks cannot work with interest.

“Similarly, these banks are not allowed to finance the acquisition of agricultural land, since they present themselves as holding companies and Tunisian law prohibits any foreigner from owning agricultural land, she added.

Amri also considered that the Tunisian legislator must take into account the specificity of the Islamic banks.