Azerbaijan’s largest bank abolishes Islamic financing
Baku, Azerbaijan, Oct. 13
By Anvar Mammadov - Trend:
The International Bank of Azerbaijan (IBA) has decided to liquidate the Islamic financing department, head of the liquidated department Behnam Gurbanzade told Trend Oct.13.
He said that the IBA will not provide Islamic banking services. The decision on liquidation of the department was made last week.
By the end of the year, the department was planning to introduce new products and services, primarily those for the financing of small and medium-sized businesses in the regions of the country. It was also planned to allocate long-term loans designed for each industry. It was planned to pay particular attention to agriculture as one of the main areas that should be developed. In addition, it was planned to introduce certain forms of financing for the construction, light and food industries.
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.
In September 2012, IBA announced the launch of "Islamic window" created within the project on introduction of Islamic banking in Azerbaijan. Later, the department of Islamic banking was established in the bank by the decision of the IBA. The range of services offered by the bank include Islamic banking products such as Ijara which is an analogue of the traditional leasing, Wakala deposit equivalent to the traditional deposit, Islamic banking cards, Qard Hassan cards.
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.
The bank's portfolio in Islamic financing amounts to nearly $526 million.
Edited by CN
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