KPMG ready to help Islamic banking in Azerbaijan
Due to the opening of the largest-in-the-region "Islamic window" by the International Bank of Azerbaijan, an interest in the expert support of Islamic banking in the country has increased.
Yesterday in Baku Neil Miller, head of KPMG International Group on Islamic finance, has said that the best experience for Azerbaijan is the experience of Kazakhstan.
"The use of Islamic banking creates the conditions for an alternative and interest-free financing. From my own experience I can say that most Muslim countries are interested in the application and use of such banking. It should also be noted that in recent years the amount of funding on the methods of Islamic banking will reach $1.3 trillion," Miller said.
He added that the application of Islamic banking, in particular sukuk (Islamic bonds), creates conditions for the formation of large financial funds.
"For the beginning of use of Islamic banking in Azerbaijan should establish appropriate tax base, modify or adapt the tax system to Islamic banking, conduct monitoring studies, and, of course, inform the population about the effectiveness of Islamic banking. The popularity of Islamic banking depends on the retail network, that is why one can also create a separate structure at the bank, a separate legal entity, an insurance company," Mr. Miller said.
KPMG representative also emphasized that a special mechanism and method of application of the start should also be developed for launch of Islamic banking.
"Azerbaijan can adopt experience of Kazakhstan in the field of financial banking, which has already begun to develop in this area," Mr. Miller said.
Although formally the financial legislation of Azerbaijan is not adapted to the standards of Islamic finance, the Islamic bank in the country already exists. In Azerbaijan, there operates first Islamic leasing company - Ansar Leasing, established with participation of the Islamic Corporation for Private Sector Development (ICD), Amrah Bank is considering the possibility of establishing an Islamic insurance company.
The IBA adopted a plan of development of Islamic finance, which has the aim of building of a group multi-investment platform on its basis. Since January, the IBA will begin mass sales of Islamic financial products, as well as to introduce elements of Islamic banking in its leasing (Joint Leasing) and insurance (International Insurance Company) companies. In this regard, KPMG recommendations have somewhat become outdated - in a couple of years, Azerbaijan will have its own experience for the adoption of a law on Islamic finance.
It appears that it makes sense if KPMG and other experts would engage in the process of preparing the first sukuk issuance in Azerbaijan - Ansar Leasing has not yet managed to find a regulatory scheme for this.