Nearly a month after the law on banks and financial institution’s approval by the Assembly of the Representatives of the People (ARP) was overturned on procedural grounds, the banking sector reform was resubmitted and approved by the ARP amidst an opposition walkout on June 9.
The Governor of the Tunisian Central Bank, Chedly Ayari, returned to the ARP for a second time as the bill was resubmitted and on Tuesday, June 7, and implored the ARP to approve the reforms to Tunisia’s banking system ‘before it is too late’, adding that Tunisia’s banking sector was ‘at least ten years behind countries like Morocco and Bahrain in financial and banking reforms’.
The ARP’s hearings on the 200 articles draft law became contentious over Article 54 regulating Islamic banking through ‘the creation of a supervisory (Sharia regulation) council in all banks and financial institutions having obtained permission to practice Islamic banking.’ After the article was rejected Popular Front and some Al-Horra deputies objected to an attempt by Ennahda deputies to reexamine and amend the article.
The article was reexamined, which led to a walkout by the Popular Front and Al-Horra, after which the bill was approved with 107 deputies voting for the bill against eight abstentions and a lone vote against.
The law on banks and financial institutions being the second of two major economic reforms, (after a law strengthening the Central Bank’s independence was approved by the ARP in April), whose passage was presented by the government of Prime Minister Habib Essid was trying to obtain ahead of a ruling on a 2.9 billion USD loan by the International Monetary Fund’s (IMF) Executive Board.
After committee hearings, the draft law on banks and financial institutions had been pushed up on the ARP’s agenda in order to obtain passage of the bill ahead of the IMF’s decision.
The bill was originally introduced into a plenary session of the ARP on May 11th and all 200 articles approved by a vote, which the Popular Front and Al-Horra had similarly walked out, of on May 12th.
In the days afterwards thirty seven ARP deputies from the Al Horra and the Popular Front parties signed a motion challenging the constitutionality of the passage on procedural grounds.
According to the ARP deputies who filed the appeal, the draft law on banks and financial institutions had been rushed through the ARP’s finance committee and its submission to a plenary session of the ARP two weeks ahead of schedule, deprived the ARP’s deputies of the constitutionally mandated timeframe to adequately review the legislation.
Although the schedule change was approved by a majority of the ARP deputies present, according to ARP rules of procedure deputies are to be granted 48 hours’ notice before a bill is introduced to a plenary session, rendering the vote approving the schedule change invalid.
The Constitutional Review Authority which held a meeting on Tuesday, May 24, and decided to accept the appeal from the Al-Horra and Popular Front ARP deputies in both form and content.
Although between original approval of the bill on banks and financial institutions and its overturning by the Constitutional Review Authority, the IMF’s Executive Board, on Friday, May 20, approved a 4 year USD 2.9 billion loan to Tunisia “to support the country’s economic and financial reform program.”