Overcoming Splits, Tunisia’s Parliament Approves New Banking Law

A man walk out of the Central Bank in Tunis, Tunisia, April 27, 2016. The Tunisian parliament on Thursday approved a new banking bill to modernize financial services. REUTERS/Zoubeir Souissi

TUNIS, May 12 – The Tunisian parliament on Thursday approved a new banking bill to modernize financial services, a second reform called for by the International Monetary Fund after a disputed central bank law passed last month.

Tunisia is under pressure from international lenders to speed up economic reforms to create jobs and growth, especially after two deadly attacks last year on the tourism industry that accounts for 8 percent of its gross domestic product.

Parliament last month approved a law to strengthen central bank autonomy and shield it from political interference, but it passed by just two votes because of political divisions among the ruling coalition parties.

Slim Besets, a lawmaker with the Islamist party Ennahda, and a member of the finance committee in parliament, said ruling parties worked together this time and avoided the dispute that almost blocked the central bank law.

Consequently, the banking law was approved by 115 lawmakers of 135 present in the 217-seat parliament. Opposition lawmakers boycotted the session.

The IMF has reached a preliminary deal to assist Tunisia with a four-year loan program worth about $2.8 billion tied to progress on its economic reforms.

That came after offers of aid from European partners. But IMF Tunisia mission chief Amine Mati urged the government to start work immediately.

The opposition, among them leftist parties, accused the government of violating national sovereignty and bowing to the terms of the IMF. But Finance Minister Slim Chaker said the government was protecting the rights of Tunisians who want to see economic growth.

“This reform is a very important step in our economic reforms to have a solid banking sector in conformity with international standards and to protect the banks in crisis time,” the minister said.

The banking law includes chapters to initiate a specific Islamic banking law for the first time. Three Islamic banks operate in Tunisia but no Islamic banking law exists.

It also includes the establishment of a guarantee fund that provides the right for about 95 percent of customers to recover their money if a bank goes bankrupt.

The first draft of banking bill was criticised by some experts who said the Islamic finance portion favoured Islamic banks over conventional banks. But the law now says all banks will be able to offer Islamic finance services.

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