May 29 2011
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Fears grow for Azerbaijani IF
Hikmet Allahverdiyez, director of Moore Stephens in Azerbaijan, told The Islamic Globe that unless banks are allowed greater freedom to invest across the economy, Islamic finance will fail. Azerbaijani banks can only provide "a limited set of Shari'ah compliant products" to retail customers and have little to offer the wholesale market he explained: "Core Islamic financial products offering long term investment financing opportunities - Musharakah, for example - remain unattainable because legislation prohibits banks to invest in the capital of other commercial entities, except for insurance and leasing companies."
In a further blow to the future of Islamic banking in the South Caucasus nation, Elman Rustamov, chairman of the Central Bank of Azerbaijan announced late last year that the CBA has no plans to develop Islamic banking within the next two to three years
While Amrahbank, 49% owned by Bahrain-based International Investment Bank, has been working with Ernst & Young to develop an Islamic banking program, Nikoil and Turanbank are only offering "the so-called 'Islamic window'", said Allahverdiyez, meaning all they are doing is accepting interestfree deposits from personal customers.
© The Islamic Globe 2011
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