Weekly economic review (jan. 9-14)

Analysis Materials 17 January 2012 11:10 (UTC +04:00)

The International Bank of Azerbaijan (IBA) and the Russian bank VTB plan to involve a Kazakh leading bank to establish a single Islamic bank in the CIS, head of the IBA working group on Islamic banking Behnam Gurbanzade told Trend.

"The discussions were held at the Fourth Baku International Banking Conference of the CIS member-states in early December 2011," he said. "The IBA was chosen as a platform and a regional center for the development of Islamic financing in the CIS countries. At present, the work is underway in this direction. It is on stage of correspondence."

He said that according to the existing agreement between VTB and IBA, the Russian bank will use the experience of Azerbaijani specialists and consultants in the field of Islamic Banking but the Azerbaijani bank - the experience of VTB.

"We will join our efforts through the CIS Financial and Banking Council," he said. "In the future we would like to bring one of the Kazakh leading banks to this cooperation and to establish a triple alliance."

He said it was proposed to establish a common working group under the CIS Financial and Banking Council. It will analyze the banking system and banking legislation in the CIS countries and submit the relevant proposals regarding the necessary changes to the Financial and Banking Council.

"It is assumed that in the future the Financial and Banking Council will negotiate with the relevant governmental bodies to ensure the activities of Islamic banks in the CIS countries, primarily Russia and Azerbaijan," he said.

The council raises this issue that at present, such new tools, as the Islamic financial products are very important during the global crisis. They provide an opportunity to finance the projects through equity participation.

IBA was established in 1992 as the successor of the Azerbaijani branch of Vnesheconombank.