Starting next year, Azerbaijan may introduce interest-free credit products in line with Islamic finance principles, according to officials at the Central Bank.
The initiative aims to expand access to “halal” financial instruments and bring local banking practices closer to standards already operating in more than 130 countries.
Speaking at the Halal Business Forum in Baku, Rustam Tahirov, director of the Central Bank’s Department for Sustainable Development of the Financial Sector, said preparations are under way to establish the legal and regulatory framework required for Islamic banking.
Once finalized, traditional banks will be able to open Islamic “windows” offering select products compliant with Sharia principles.
“After the regulatory base is in place, banks will begin introducing Islamic banking products in stages. The approach is cautious and based on international best practices,” Tahirov explained. He added that amendments to the Civil Code, Tax Code, and Banking Law are being drafted to create the necessary legal basis for these services.
Economist Ruslan Atakishiyev speaking to Milli.Az, said that Islamic banking offers fairer mechanisms both for saving and lending, as profits and risks are shared between the bank and clients.
“People invest their money in accordance with Islamic rules and become partners with the bank. Even ordinary citizens and pensioners can participate and share in the returns. Small business owners and those seeking to buy homes can also benefit,” he noted.
Globally, Islamic banking assets exceed $4 trillion, and in Turkey alone they are valued at more than $80 billion. Atakishiyev said Azerbaijan’s introduction of such loans could open new opportunities for both investors and borrowers who prefer ethical, non-interest financial solutions.
