Libya is amending its banking laws to attract foreign investment and stimulate its private sector as it seeks to create an investor-friendly environment following last year's war that ousted Muammar Qadhafi, the central bank governor said. In an interview with Reuters, Saddeq Omar Elkaber said the new Libyan leadership was working on creating the legal framework and necessary infrastructure, including updating a 2005 banking law which first allowed foreign banks in the North African country.
"We are working on amending laws to stimulate the private sector, as well as change the national banking structure," he said. "We have formed a committee to re-revise the law. We are also about to complete our preparations regarding Islamic banking regulations." Mustafa Abdel Jalil, chairman of Libya's ruling National Transitional Council (NTC) said in October Libya's new rulers were working on an Islamic banking system.
Elkaber said the Islamic banking proposal would be soon handed to the NTC for approval, but gave no other details. Speaking in his office in central Tripoli, Elkaber said it was still to early to formulate a policy to award new licences to foreign banks. "We need a detailed study to find out what will be the required number of banks in cities and regions," he said.
With the civil war over, foreign executives are weighing the opportunities against the risks in an oil and gas-producing nation with the resources to pay for urgent reconstruction and healthcare needs. As the country tries to get back to business though, the government struggling to impose order on a country awash with weapons.
Last week, Prime Minister Abdurrahim El-Keib promised to give each Libyan family 2,000 dinars ($1,540) as well as other financial help to unemployed former fighters, as discontent from those who thought progress would be faster simmers. Elkabeer said authorities still lacked an updated database to determine the total number of Libyan families and estimated the cost of the handout would be at least 3 billion dinars.
He said it would take eight weeks to finalise the database. "The central bank and government are committed to the implementation of the law but there must be a transparent mechanism to ensure that there is no fraud," Elkabeer said.