Moroccan Association for Participative Finance Professionals has submitted the draft Islamic banking and insurance regulations to parliament and expected to be passed by end of 2014, according to Reuters.

Reuters quoted Amaghdir, chairman of the Islamic finance business association, saying: "We hope the validation of the law will be for an Islamic banking window and then for full-fledged takaful (Islamic insurance)."

Morocco has been aiming to develop Islamic finance for about two years, partly as a way to attract Gulf money and fund the huge budget deficit.

The government originally planned to issue its first sovereign Islamic bond this year but that plan appears to have been delayed by disputes within the government over other policies and a cabinet reshuffle in October.

Amaghdir said that the Islamic finance laws could clear the way for Morocco to see its first conventional bank with an Islamic window, as well as sukuk issuance by private firms.

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"Two or three private firms can tap the market fairly quickly after the laws are passed. We need a national sharia (Islamic law) board to allow sukuk to be issued within the country. If the laws are validated by the end of next year, we could see issuance soon after," Amaghdir added.