Kazakh investment company introduces services on Islamic banking in Azerbaijan

Business Materials 29 May 2015 20:16 (UTC +04:00)

Baku, Azerbaijan, May 29


Islamic Transregional Economic Centre established by the Kazakh investment and finance company Badr Finance & Investment is in talks with Azerbaijani banks on introduction of Islamic services, Chairman of the Board of Directors of the company Adalat Jabiyev told Trend May 29.

"Our main task is to explain to banks that they can provide services for Islamic banking, despite the absence of appropriate legislation," he said. "On the one hand, it is not necessary for them to wait until a law on Islamic banking is introduced, on the other hand, they will already have some experience in this field and be ready when this law is introduced."

Jabiyev said that negotiations are conducted within the framework of the Partnership Banking program, which is carried out in accordance with the Islamic principles.

"When people talk about the Islamic principles in banking, the phrase "interest is prohibited" often comes to mind," he said.

"But this causes confusion: what kind of interest and why banned?" he said. "As a result, when a customer comes to the Islamic bank, he wants to see the contract which says that its loan is interest-free. But we must understand that Islamic banks, like any other bank, must also earn."

It was also important to determine the right concept when working out the program, he said.

"Partner banking" means that the bank and the client act as partners, he explained. "In other words, they support each other, but the client does not have false expectations, for example, regarding that interest-free loan."

However, he added that customers feel secure, whereas in modern banks, they do not feel so and think that the bank deceives them.

Currently, several banks - the International Bank of Azerbaijan, Amrahbank, Nikoil Bank - render Islamic banking services.

Edited by CN

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