Azerbaijan, Baku, Dec. 5 /Trend A.Akhundov/
Support to creating the Islamic financial institutes in Azerbaijan on the government level and encouraging foreign structures desiring to enter the market will help to develop Islamic banking in Azerbaijan.
Hisham Nazih Al-Nasser, director of asset management and advisory activities of the Islamic Corporation for private sector development (ICD), an affiliate of the Islamic Development Bank (IDB) said about it to Trend.
Al-Nasser noted that it would also be effective to approve the special law about the Islamic financing.
"It will create an environment for developing internal initiative and favorable conditions for attracting foreign players, which promotes increase and expansion of this sector," Al-Nasser said.
Al-Nasser noted that there are a great potential for Islamic banking development in Azerbaijan.
"There is a great potential for Islamic banking in Azerbaijan and a need in Islamic financial institutions, products and services. More than 90 percent of Azerbaijani population is Muslims, which is also an important factor," Al-Nasser said.
The only product of Islamic banking in the market today is Nikoil Bank's Wadia yad Daman product, which represents a savings deposit without an interest and funds from the account and may be withdrawn at any time. The bank brought the product to market in May 2011.
Nikoil Bank is the first Azerbaijani bank providing this service. Amrahbank, Turanbank, Texnikabank announced the intention to provide Islamic banking services. The International Bank of Azerbaijan (IBA) have involved a consultant on introducing Islamic Banking and initiated the preparation of the corresponding law.
IBA began to provide Islamic banking services in 2003, becoming the first country on the Azerbaijani banking market. The bank implemented activities in this area by borrowing funds from a group of the Islamic Development Bank (IDB) and has invested $10 million under the Islamic
Azerbaijan is a member of the Islamic Development Bank since 1992 and the portfolio of the IDB in the country is about $1.2 billion that are allocated to projects in various sectors of the economy.