Azerbaijan, Baku, April 29 / Trend N.Ismayilova /
The Azerbaijani AmrahBank postponed plans to introduce the product of the Islamic banking, the bank said on Friday.
"Today, the country lacks legislative framework allowing to carry out operations on the Islamic finance system. Regarding this, our bank put aside plans to develop these products and present them to market," the bank said.
AmrahBank still interested in this market segment, but the lack of legal framework prevents entrance to the market.
The bank had previously announced plans for the introduction of Islamic products - Ijara. It was planned that first only one bank branch will present the product. Afterwards, it could be sold in other branches of the bank.
Ijara is the agreement between the bank and the customer. The bank buys and then leases the equipment on a customer's demand. The lease term and the rent amount are stipulated in advance. The equipment remains in the property of the bank. Ijara is used to finance the production, construction and acquisition of goods intended for leasing.
Islamic Banking is the banking system in which all the related transactions are conducted in accordance with Sharia. It allows the bank to provide itself with the assets and prohibits dealings on the principle of interest basis.
Amrahbank is one of first commercial banks of Azerbaijan. It was established in 1993. The bank is leader among local banks on the number of branches (23). The authorized capital of the bank exceeds 14 million manat. Some 49 percent of shares belong to the International Investment Bank based in Bahrain.