Azerbaijani bank increases Islamic finance borrowings

Azerbaijan, Baku, Nov. 15 / Trend A.Akhundov /

In the two months since the establishment of the Islamic Banking Department, the International Bank of Azerbaijan (IBA) has raised $60 million, Chairman of the Board Jahangir Hajiyev told Trend.

"The money is attracted from the Islamic Development Bank, the Fund in the UAE and other financial institutions. Currently, negotiations are underway to attract new funds," Hajiyev said.

According to him, Islamic banking is a large reservoir in the world finance and banking, to which Azerbaijan has virtually had no access before.

"We see great potential in this direction, and the sooner corresponding agencies will create the legal framework, the better that will be for the sector. There is no need in changes in legislation. This is not prohibited and what is not prohibited is allowed. It would be appropriate to talk not about changes in legislation, but about creating them "Hajiyev said.

This department will operate as a separate structure within the IBA and will have its treasury and software.

Given that this is the first project on Islamic finance, at this stage the structure is created in the parent bank, support is needed for its future development. In the future, the possibility of its transformation into a separate subsidiary, which would depend on the adoption of corresponding legislation in the field of Islamic banking, is not excluded Till the decision of the Azerbaijani Central Bank, it will operate within the IBA.

IBA was the first in the banking market to start providing Islamic banking services in 2003. The bank carried out activities in this field through attracted resources from the IDB.

The consortium of Salans, KPMG, Pinsent Masons and Dar al Shariah companies assisted IBA in the creation of specialized structures for the provision of Islamic banking products and services.

The IBA was founded in January 1992 and is the largest bank in the country. Its main shareholder is the Azerbaijani government, which owns 50.2 per cent of the shares, while 49.8 per cent is owned by private physical

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