The Central Bank of Azerbaijan has developed and submitted to the government a legislative package that reflects the basic principles of Islamic finance and provides for five core products: three of them relate to assets, two to liabilities. The news was reported by FinFly, citing Shahin Mahmudzade, Director General of the Central Bank of Azerbaijan.
According to him, the initiative aims to create clear rules for market participants, ensure legal certainty, establish appropriate risk management mechanisms and protect consumer rights.
"We believe that the most important factor in building a sustainable market is the creation of a proper, predictable and transparent legislative environment. Our second priority is ensuring competitive neutrality with respect to the traditional banking sector. We do not consider it right to levy different taxes or fees on operations with the same economic substance solely because of differences in their legal and contractual form.
For this reason, the neutrality of taxes and fees, the harmonisation of relevant legal procedures and the integration of Islamic finance products into the existing financial infrastructure are of particular importance. At the same time, the deposit insurance mechanism is one of the important conditions for such integration," he said.
Mahmudzade added that the development of Islamic finance requires new knowledge and skills.
"This concerns not only Islamic banking but also the upskilling of specialists in Islamic law, Islamic accounting and risk management in the field of Islamic finance. Therefore, developing training in cooperation with educational institutions, professional associations, financial institutions and international partners is one of the important priorities," he emphasised.
