BAKU, Azerbaijan, November 18. The regulator of the Astana International Financial Center (AIFC) has decreased the minimum equity requirements for Islamic banks, insurance companies, and financial companies, Trend reports referring to the AIFC.
Kazakhstan passed an Islamic banking and financing law in 2009, which marked the beginning of the primary stage of Islamic finance development. This law initiated the process of regulating Islamic banking activities in Kazakhstan, as well as the establishment of "Al Hilal" Islamic Bank JSC (UAE) in 2010.
"Amendments to the law were adopted in 2011 in order to develop the Islamic securities market. In 2012, "Kazakhstan Development Bank" JSC successfully placed the first release of Islamic securities on the Malaysian Stock Exchange. A total of 62 percent of the release was distributed among Malaysian investors, while 38 percent was in the Kazakh market. Moreover, new norms on Islamic insurance and leasing regulations were accepted in the state," said the AIFC.
Today the Islamic financing market in Kazakhstan is presented by Islamic banks and leasing companies, said the organization.
Considering the importance of the Islamic finance sphere's development, the necessary operating conditions for Islamic finance institutions in both the retail and corporate sectors are currently created in the AIFC. A legislative framework and a master plan for the development of Islamic finance are being developed with the assistance of international organizations such as the Asian Development Bank (ADB).
"International organizations such as IFSB (Islamic Financial Services Board), AAOIFI (Accounting and Auditing Organization for Islamic Financial Institutions), and CIBAFI (General Council for Islamic Banks and Financial Institutions), a member of which AIFC has been since 2017, are supporting the development of Islamic finances," said the institution.
The regulator of AIFC (AIFC's committee on financial services), has decreased the minimum equity requirements for Islamic banks, insurance companies, and financial companies in order to support the industry. The AIFC exempts licensed activities, including those related to Islamic banking, finances, and insurance, from corporate tax and value-added tax.
"The created legislation creates an opportunity to open Islamic banks (including Islamic "windows" of traditional banks), Islamic financial companies, asset management companies, Islamic brokerage and dealer companies, and Islamic insurance companies in the AIFC.
Currently, various companies in the Islamic finance industry from countries such as the UK, the US, Malaysia, Bahrain, Qatar, Russia, and Kazakhstan are registered in the AIFC. The list of companies includes Islamic banks, Islamic financial firms, consulting companies in the field of sharia, Islamic FinTech, and so on.
The conditions for releasing Islamic securities are created in the AIFC exchange stock. The official list of the stock includes the Islam Development Bank's "sukuk" and Qatar International Islamic Bank. Moreover, the following exchange notes that meet the requirements of the sharia were released for retail investors: Islamic ETN and Gold ETN.
According to the report of the Global Islamic Finance Report (GIFR 2022), Kazakhstan took the 14th position in the Islamic Finance Country Index rating based on the results of the work carried out in 2022. In addition, Kazakhstan ranked 24th in the Global Rating of Islamic Finance Technology in the Global Islamic Fintech Report for 2022.