IslamicFinance.de

Alwaleed Philanthropies has made a new $5 million investment, in their partnership with Gavi, the Vaccine Alliance, in a proposed commitment to further prevent the spread of disease in low-income urban areas in which additional funds are proposed to be made between 2020 and 2024.

Elshan Rahimov, chairman of the Cooperation of Azerbaijan and Arab Countries Public Association, said the introduction of Islamic banking in Azerbaijan was being delayed.

Islamic finance is still a nascent industry in Azerbaijan, even though the country’s large Muslim population indicates great potential demand for its services. The key hurdle that limits any meaningful expansion of Islamic finance in the country is the absence of a comprehensive regulatory framework. It is therefore important to develop a full-fledged legal framework that is specifically tailored for monitoring, guiding, and supervising the Islamic banking system. Islamic finance, as an ethical form of finance, can do an enormous amount of good. Islamic finance forges a closer link between real economic activity that creates value and financial activity that facilitates it. Islamic finance can attract investors from GCC and Asia to Azerbaijan. However, the country continues to face multiple challenges, such as a lack of public awareness and a talent shortage in Islamic finance. Still, favorable regulation remains the key to Islamic finance growth in Azerbaijan.

Governor of the Central Bank of Iran (CBI) Valiollah Seif said the country plans to establish a bank in Azerbaijan with 100% Iranian ownership. The plan involves turning a branch of Bank Melli Iran in Azerbaijan into an independent Azerbaijani bank. Seif added that all the shares of the new bank will be owned by Bank Melli Iran and that the details would be discussed next week during the visit of the Azerbaijani delegation to Tehran. Seif emphasized that certain plans were on agenda for Iran and Azerbaijan to use their national currencies in mutual transactions. Currently 32 banks operate in Azerbaijan and 36 banks operate in Iran.

The Islamic fund on microfinance may be soon created in Azerbaijan. Recently, a mission of the Islamic Corporation for the Development of the Private Sector (ICD), which included the ICD Senior Regional Manager of for CIS and Europe countries Samir Taghiyev and the Microfinance Advisor at the ICD Bassem Khanfar, visited Baku. Azerbaijan has become one of the two countries, where the ICD starts negotiations with participants of the microfinance market. The second country is Kazakhstan. Earlier, during the 8th Micro-finance Conference in Baku, Executive Director of Azerbaijan Micro-finance Association (AMFA) Zhale Hajiyeva said that businessmen of post-Soviet countries also showed interest in the market. Currently, loan portfolio of Azerbaijan’s microfinance organizations amounted to $485.16 million, according to AMFA.

During the visit, the ICD delegation will meet with representatives of Azerbaijan's financial sector to study the potential of micro-finance market and works done in this sphere. The conference will also be attended by representatives of Germany's KfW Group.

Azerbaijan and Islamic Corporation for the Development of the Private Sector (ICD) will discuss the opportunities of financing the country's agriculture. The topic will be discussed by ICD's general driector Khaled Al-Aboodiin during his visit in Baku on May 31. The agricultural projects will be financed through the new Food and Agribusiness Fund with an authorized capital of $600 million. The fund will mainly focus on the production optimization of the companies working in agriculture and a decrease in their logistics inefficiency.

Iran is working on a plan to establish a joint bank with Azerbaijan. Elman Rustamov, the chairman of Azerbaijan's Central Bank (CBA) is discussing the matter with Iran's Minister of Economic Affairs and Finance Ali Tayyebnia. The two neighbors are also discussing the opening of branches of the two countries’ banks in Baku and Tehran. The Iranian minister said the main obstacle on the way of banking cooperation is the existing sanctions against Iran's financial sector.

The government of Azerbaijan announced that it is in talks with the Islamic Development Bank (IDB) on application of Islamic banking instruments in the country. Deputy Economy Minister Sahil Babayev also said that the Bank is ready to provide technical assistance to Azerbaijan, which has a predominantly Muslim population. The primary scope of our model’s project has already been outlined, he added. Azerbaijan, alongside Kazakhstan, is among several central Asian countries creating a more welcoming framework for sharia-compliant banking to attract investments and financing from the Islamic capital market. Babayev faced difficulty to name the exact date of introduction of Islamic banking model in Azerbaijan, explaining it with the number of issues to be solved.

Azerbaijan could see the launch of its first standalone Islamic bank as early as next year as the government makes progress to introduce legislation to facilitate interest-free finance. Azerbaijan, alongside Kazakhstan and Tajikistan, are among several central Asian countries creating a more welcoming framework for sharia-compliant banking with the help of the Jeddah-based Islamic Development Bank. A working group of cabinet minsters and the IDB is making progress on the legislation, which would allow the proposed Islamic bank to launch next year, said Behnam Gurbanzada, chief executive of Islamic finance consultancy BEST Solutions.

Azerbaijan could see the launch of its first standalone Islamic bank as early as next year as the government makes progress to introduce legislation to facilitate interest-free finance, Behnam Gurbanzada, an advisor to the new venture said. Azerbaijan, alongside Kazakhstan and Tajikistan, are among several central Asian countries creating a more welcoming framework for sharia-compliant banking with the help of the Jeddah-based Islamic Development Bank. A working group of cabinet ministers and the IDB is making progress on the legislation, which would allow the proposed Islamic bank to launch next year, said the independent Islamic finance consultant. The proposed Islamic bank would be able to launch operations as soon as the legislation is passed, said Gurbanzada.

The International Bank of Azerbaijan (IBA) has decided to liquidate the Islamic financing department, head of the liquidated department Behnam Gurbanzade said. The bank's portfolio in Islamic financing amounts to nearly $526 million. By the end of the year, the department was planning to introduce new products and services. It was also planned to allocate long-term loans designed for each industry and to pay particular attention to agriculture. In addition, it was planned to introduce certain forms of financing for the construction, light and food industries. However, the decision on liquidation of the department was made last week.

The International Bank of Azerbaijan (IBA), the country's largest and the only state-owned bank, has closed its Islamic banking department. Behnam Gurbanzade, IBA's director of Islamic banking, said the department was closed last week, but did not give the reasons. The department started the service in April 2013. The decision was reportedly linked to structural changes in the bank.The bank's Islamic assets rose to $526 million at the end of 2014 from $160 million a year earlier. "The agreements signed with international financial institutions within the framework of Islamic banking, as well as the bank's liabilities in this area will remain in force.

Iran and Azerbaijan discuss creation of a joint bank and the opening of branches of the two countries' banks in Baku and Tehran. There is a branch of Bank Melli Iran in Azerbaijan, but it is not active, Iran's Minister of Communications and Information Technology Mahmoud Vaezi said, adding that preliminary talks on these issues were already held. Branches of the new bank will operate in both Azerbaijan and Iran.

Iran has asked the government and the Central Bank of Azerbaijan (CBA) to return the assets of Iranian entities remaining on the accounts of bankrupt Azerbaijani Royal Bank. Officials have appealed to the Azerbaijani government and CBA on the issue of solving the problem with the money of the Export Development Bank of Iran and other entities of the country, which remained on the accounts of Azerbaijani Royal Bank, which has declared its bankruptcy.

Two Iranian private banks – “Parsian” and “Pasargad” are interested in opening branches in Azerbaijan, the head of the secretariat of the Azerbaijani-Iranian intergovernmental commission on cooperation in trade, economic and humanitarian spheres Mehdi Mohtasham said.

The Islamic Corporation for the Development of the Private Sector (ICD) is considering options for support of the private sector in Azerbaijan. According to the Ministry of Economy and Industry, Minister Shahin Mustafayev has received Khaled Mohammad Al Aboodi, ICD CEO. During the meeting, the Minister proposed to cooperate in the industrial and agricultural sector including the project of the Sumgait Chemical Industrial Park and establishment of agricultural parks in Azerbaijan, the Ministry said. Aboodi expressed his satisfaction with the cooperation with Azerbaijan and proposed to expand it.

The Islamic Development Bank (IDB) plans to expand its cooperation with Azerbaijan in respond to the request of the national government. In this regard the bank may send the MDPS to the country. The material is distributed only on private subscription conditions. If you are interested in it please contact the Marketing Service of Fineko Agency.

Russia hopes to learn from the experience of Azerbaijan in the field of Islamic banking, said Sergey Drobyshevsky, the scientific director of the Gaidar Institute for Economic Policy in Baku. He said the presence of IBA Moscow, a Russian subsidiary of the International Bank of Azerbaijan, must contribute to this. Drobyshevsky believes it will be easier for the Azerbaijani banks and businessmen to work in Russia than the Malaysian specialists of that sphere. Behnam Gurbanzada, the director of Islamic banking at the IBA, earlier called Russia a "promising" platform to further the development of Islamic finance.

President of the Republic of Azerbaijan Ilham Aliyev has met with President of the Islamic Development Bank Group Ahmad Mohamed Ali in Jeddah. They expressed their satisfaction with the cooperation between Azerbaijan and the Islamic Development Bank. It was noted that the ongoing development processes in Azerbaijan gave a push to the expansion of the bilateral relations. Azerbaijan and the IDB cooperate in the fields of oil and gas, power industry, water supply, road construction, implementation of infrastructure projects, agriculture and industry, and investment making. The parties exchanged views over the issue of involving other partners in the bilateral cooperation.