The country's banking system includes the Central Bank (Banque d'Algerie), six state-owned banks, one public development bank, and one private bank. An Islamic Bank is jointly owned by a state-bank the Saudi Al-Baraka Group. Algeria's sole private bank, Union Bank, operating since 1994, concentrates on merchant banking. For an extended period, Algerian banks were merely depository institutions, which helps account for their inefficiency. These banks lent mainly to the public sector, which left the banks with a legacy of non-performing debt and managerial difficulties. The country's implementation of World Bank and IMF reform programs has led to their recapitalization and to the banking system's liberalization. The Government encourages leading international banks to establish branches in Algeria.
Except for a few anomalies, Algerians are prohibited from holding real and financial assets abroad. Algerian importers are permitted access to foreign currency as long as they possess the dinar equivalent of the hard currency cost of the imports.
© 2000 Mena Report (www.menareport.com)