Azerbaijan to boost preparation of legal framework of Islamic banking

Economy Materials 22 April 2015 15:37 (UTC +04:00)

Baku, Azerbaijan, Apr. 22
By Azad Hasanli - Trend:

Preparation of a legal framework for regulation of the activity of Islamic financial institutions in Azerbaijan will be boosted following the ratification of a grant agreement with the Islamic Development Bank (IDB), Director of the Islamic banking department of IBA Behnam Gurbanzade told Trend Apr.21.

IDB is ready to provide Azerbaijan with a grant of $200,000 in order to create legislation in the field of Islamic banking. The grant is for 12 months.

Gurbanzade said that not all government agencies expressed their attitude and submitted their comments to this grant yet.

"The working group, which includes representatives of the IBA, has prepared an initial draft of the law, but it will be submitted to the government only after the ratification of the IDB grant and the arrival of the bank's specialists who will work with us in this direction," he said.
The working group engaged in the development of legislation in the field of Islamic banking included representatives of the Central Bank of Azerbaijan, IBA, Ministry of Economy and Industry, Finance, Taxes and Cabinet of Ministers.

IBA started rendering Islamic banking services in 2003, becoming the first in the country's banking market. The bank has been providing services in this sphere with the resources attracted from the Islamic Development Bank group.

In 2013, a consortium of Salans, KPMG, Pinsent Masons and Dar al Shariah companies was assisting IBA in the creation of a specialized structure for rendering products and services of Islamic banking.

The IBA was founded in 1992 as the successor of the Vnesheconombank's Azerbaijani branch. The IBA holds the dominating position in the country's banking sector.
The bank's main shareholder is the Azerbaijani government which owns a 50.2 percent share. The remaining shares of the bank are owned by private individuals and legal entities.

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