Azerbaijani largest bank is ready to promote Islamic banking in CIS

Business Materials 10 February 2014 20:00

Baku, Azerbaijan, Feb. 10
By Emin Aliyev - Trend:

Azerbaijan has a good chance of setting up an Islamic banking center across the CIS and International Bank of Azerbaijanis ready to take responsibility on promotion of Islamic banking in CIS countries as requested by Financial-Banking Council of CIS, IBA Islamic banking department head Behnam Gurbanzade said in an interview with Azernews newspaper on Feb. 10.

"Globally, Islamic banking is an increasingly visible alternative to conventional banks in Islamic countries and countries with many Muslims," he said. "Moreover, we have already started such work with IBA-Moscow Bank LLC (IBA subsidiary in Russia). Together we are analyzing Russian legislation for possibility to provide financial services based on Islamic principles and to develop Islamic banking products so that they would conform to Russian legislation. As a result, the initiative of CIS Financial-Banking Council to define IBA as a common bank for Islamic financing development will find its solution."

"We have all prerequisites to build a bridge between Asia and the Middle East, as well as between the CIS and the Gulf countries," he said.

"This, in turn, will enable us to receive good financial dividends," he said. "The major plan for this year is to develop the plan of amendments to the regulatory in order to enable the full-fledged Islamic banking in our country. The amendments will fasten up the process of creating the Islamic development center in Azerbaijan."

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.

Last year 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 January 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.

Translated by NH