CBA not considering legislation for Islamic banking

Azerbaijan, Baku, 6 May / Trend A.Akhundov /

The Central Bank of Azerbaijan (CBA) is not currently considering the issue of making amendments to the legislation to ensure the functioning of Islamic banking in the country, President of CBA Elman Rustamov told Trend.

"We don't have this issue on the agenda. If there is no legislative basis, no one has the right to develop this activity. It is necessary to first create a legislative basis, then a regulatory one based on it, then licensing and the issuing of permits can begin. If there is no such basis, these actions remain as exploratory by nature," Rustamov said.

The first available end date and the only 'Islamic window' in Azerbaijan created by the IBA, has already begun serving customers. The amount of assets attracted from Islamic financing sources hit $60-70 million. At the same time, Islamic leasing products are actively offered via the Joint Leasing Company one of co-founders of IBA.

The range of services offered by the bank includes Islamic banking products such as Ijara which is an analogue of traditional leasing, a Wakala deposit equivalent to the traditional deposit, Islamic banking cards and Qard Hassan cards.

All the procedures and documentation for these services provided by the Islamic Banking Department of IBA meet the standards set out by the leading Islamic financial regulator AAOIFI (Accounting and Auditing Organisation for Islamic Financial Institutions).

In order to create a legislative basis for Islamic banking, the IBA together with international financial institutions is preparing proposals for amendments to the banking legislation.