Islamic finance is an important tool for inclusive economic development, said Chairman of the Central Bank of Azerbaijan Taleh Kazimov at the Global Islamic Finance Forum organized within the framework of the 51st Annual Meeting of the Islamic Development Bank (IsDB) Group held in Baku, APA reports.
He said that the changes observed in the global economy further increase the importance of Islamic finance:
“Today, the global economy is going through a period of profound structural changes. Increasing fragmentation in trade and rising uncertainties make it necessary to build adaptive and inclusive financial systems. With its risk-sharing and ethics-based approach, Islamic finance offers practical tools that can contribute to the formation of these systems.”
The CBA Chairman noted that progress in two main directions is essential for the successful development of Islamic finance in Azerbaijan:
“First, improving the legal framework and ensuring transparency in the regulatory environment. Second, forming and developing professional human capital that will ensure the efficient functioning of the Islamic finance system.”
Taleh Kazimov stressed that amendments to legislation are being prepared in order to expand the application of Islamic finance instruments:
“We are already taking concrete steps in this direction. Amendments to the Civil Code, the Tax Code and financial legislation are being prepared to expand the application of Islamic finance instruments. The goal is to create an equal and neutral regulatory environment between conventional and Islamic finance.”
He added that, taking into account the preparedness level of market participants, preference has been given to the implementation of the “Islamic window” model at the initial stage:
“Taking into account the current level of preparedness of market participants, we have given preference to the implementation of the ‘Islamic window’ model at the initial stage. At the next stage, after assessing market demand, a decision will be made regarding full-scale implementation.”
The CBA Chairman said that the regulatory sandbox mechanism is also being actively used:
“Currently, two banks are successfully testing their products on this platform, and the process is being carried out under the supervision of the Central Bank of Azerbaijan.”
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