International Bank of Azerbaijan implements strategies for Islamic banking - IFN

International Bank of Azerbaijan implements strategies for Islamic banking

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AZERBAIJAN: The International Bank of Azerbaijan (IBA) is said to have several strategies lined up for the full implementation of Islamic finance in the country. Behnam Gurbanzada, the director of the Islamic banking department at IBA, has revealed that a variety of projects relating to Islamic banking are presently being discussed with foreign partners. The bank is seeking to attract investments, access domestic and foreign markets, participate in international economic platforms and improve the republic’s legal framework with regards to Islamic banking. According to Gurbanzada, the bank is currently mulling over the establishment of an Islamic banking subsidiary and is looking to set up a training center on Islamic banking to provide information and consultation to commercial banks that are interested in Shariah compliant banking. He noted that several banks such as Amrah Bank, Turan Bank and Bank Standard are among the financial institutions in the republic that are interested in exploring this sector. It is also reported that Azerbaijan is looking to create a special working group to develop a legal framework for the regulation of Islamic banking with assistance from the IDB. The working group will consist of representatives from the central bank, IBA and the Ministry of Finance and Taxes, which are scheduled to meet with the IDB in the republic’s capital of Baku this November. The legislative proposals are likely to eliminate the ban on commercial banking activities as well as a double taxation in value added taxes in trading activities. Following this, a proposal is due to be submitted to the parliament by May next year. As the largest bank in the republic, IBA holds a 33% market share in terms of banking assets and is the first and only bank that offers Islamic banking products in Azerbaijan. Funds collected through IBA’s Islamic window are placed in a separate sub-treasury account and is not combined with its conventional accounts.