The first house of the Moroccan parliament has approved a governmental bill to set up and regulate Islamic banks and enable private companies to issue Islamic debt.

In order to become legislation, the bill still requires to be passed in a final vote in the second house in the coming weeks.

"The bill has passed (in the first house) by 75 votes and no one was against it," Moroccan Parliament economics and finance committee head Said Khairoune was quoted by Reuters as saying.

According to the provisions of the bill, foreign banks as well as local lenders can establish Islamic banks in Morocco.

As per the new law, Islamic Banks can provide their services to customers in three modes, including Mudaraba, Ijara and Musharaka.

To oversee the Islamic finance sector, the country’s central bank has started to form a central sharia board consisting of of Islamic scholars.

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By GlobalData

In the last couple of years, Morocco has been planning to develop Islamic finance, as part of its strategy to attract capital flow from Gulf countries.