International Bank of Azerbaijan expects to set up Islamic unit in Qatar in 2013 (By IFN)

GLOBAL: International Bank of Azerbaijan (IBA) has disclosed that it is looking to establish an Islamic banking unit in Qatar.

In a report, Behnam Gurbanzada, its director of Islamic banking, said that the bank will tie up with a local entity, following which it will launch in Qatar in the first quarter of 2013.
The bank, which is a conventional bank, provides Shariah compliant services through a window in its home market, mainly catering to small and medium-sized enterprises. However, the sluggish development of Islamic finance in Azerbaijan has likely contributed to IBA’s push to look abroad in its provision of Shariah compliant banking services.

In an earlier contribution to Islamic Finance news, Behnam noted that: “Islamic finance and banking has existed in the Azerbaijani market since 1991, but due to an absence of appropriate legislation and regulation; stemming from a lack of support from the regulatory authorities, much of the Islamic activity in the country has been imperceptible, only silently countenanced by regulatory bodies.”

However, he added that since 2010, the industry had become increasingly sanctioned by officials. Nonetheless, he said that: “The existing banking law does not prohibit the use of certain Islamic banking tools, although at the same time it does not regulate the fundamental requirements of Islamic banking.”

In spite of a limited legal framework for Islamic banking in Azerbaijan, IBA has participated in several Shariah compliant deals in the country. In 2011, it financed three projects amounting to US$9.7 million; booking US$40 million-worth of assets in its Islamic finance portfolio.

The bank’s Qatari venture will follow the establishment of its Dubai representative office in 2008. It also has subsidiaries in Georgia and Russia.
According to Behnam, the bank’s services in Qatar will include deal arranging, extension of credit as well as custody and advisory services.

See: http://redmoney.newsweaver.co.uk/1003pe6ra7fh38rwoni3wx?email=true&a=6&p=26200115&t=21733475