Int’l Bank of Azerbaijan ready to apply to Central Bank for permission to start Islamic banking operations

Baku, Fineko/ The consultants drawn by the International Bank of Azerbaijan for Islamic banking development are completing their work.

IBA Islamic banking group’s head Behnam Gurbanzadeh says that the consultants are finalizing a report on the work.

“Immediately after receiving the report it will be submitted to the IBA Board to apply then to the Central Bank of Azerbaijan for permission to start Islamic banking operations,” Gurbanzadeh said.

He added that the first phase of the project has been finished. Within its framework the consultants evaluated the Islamic banking tools to be applied without changing the current legislation of Azerbaijan.

“The consultants proposed a new model for the Azerbaijani financial market to enable to increase the flow of liquid funds into the country, raise investments and open good markets for further financing of small and medium business,” the group’s head said.

The consultants estimated about 50 Islamic banking instruments, oriented primarily to the corporate sector.

“Within the first stage of the Islamic banking project the legislation allows introduction of about 6 Islamic instruments without changing the legal regulation, if the Central Bank of Azerbaijan is not against and gives us permission to conduct such operations.

In the future, on the basis of practice of applying the first 6 products, we will work on the second stage of the project, within which a legislative change initiative can be proposed. Today we want to show that this is a working model, bringing harm neither from economic nor social point of view, and then to begin the main part of the project,” Gurbanzadeh said.

The project consultants are Salans, KPMG, Pinsent Masons and Dar al Shariah.