Azerbaijan, Baku, Dec. 2 / Trend N. Ismayilova /
The CIS Financial and Banking Council and the International Bank of Azerbaijan (IBA) began working together to create the Islamic bank, the CIS Financial and Banking Council coordinating council chairman Anatoly Kazakov told media today.
"The Financial and Banking Council raises this issue because new tools, such as Islamic products are important during the global crisis," he said. "They provide an opportunity to finance the projects through equity participation. Islamic money is long enough and cheap money. We need it to modernise the economy today." adding the developments are at the initial stage.
"There are many aspects," he said. "This will be preceded by adjusting the banking legislation. Although nothing hampers to register the established bank as an investment, the legislation must be changed."
There has been an outflow of European banks' capital during the debt crisis. "The East accumulated a lot of money which must be directed to the good markets. In this respect, the CIS market is one of the most attractive."
"We look for a variant," he said. "But there will be several meetings for further discussions. The bank will be established either in Azerbaijan or Russia."
He said that it is important for the state to be active, as there are many negative examples. "Russian legislation permits the activity of an Islamic bank, which can work as an investment bank," Mr Kazakov said.
IBA was established in 1992. The IBA holds a dominant position in the banking sector. The state share in charter capital is 50.2 per cent share, the rest being distributed among private legal and groups.