These new rules are to be positioned as part of Algeria s effort to streamline and restructure its banking system. The changes are related to the creation of banks and other financial institutions, transfer of profits and dividends and the movement of capitals within the context of investment made by non resident investors. Since the adoption in 1990 of the law liberalizing the banking sector, only very few banks were established. Cumbersome administrative requirements led to a very slow license issuance process.
Today there are only four private banks officially authorized to do business.
While Union Bank is an investment bank, the three others focus on retail banking. El-Baraka is thus the only joint bank with state and private investors. It is also the only bank that is based on Islamic banking and the Muslim rules of the Charia. But these modifications are effective only now. Specialists who analyzed the modifications, say that Foreign banks and investors are to benefit from a less rigid system of dividend and fund transfers out of Algeria.