The National Bank of Tajikistan (NBT) plans to establish the Consultative Council for Islamic Banking Services.
According to the NBT press center, the Council is being established for the purpose of introducing Islamic banking in Tajikistan.
Tajik central bank invites contenders for becoming members of the Council for a specialized interview. The contenders must have appropriate education and a certain experience. They reportedly also should know Tajikistan’s legislation and the NBT regulations on Islamic banking and should be aware of Islamic jurisprudence (fiqh) and principles of Islamic financing.
The announcement on recruitment of specialists knowing Islamic banking has appeared after a visit of a delegation of the Islamic Corporation for Development of the Private Sector (ICD) to Dushanbe at the end of last week last week.
The NBT head Jamshed Nourmahmadzoda met with the ICD Chief Executive Officer (CEO) Khaled Mohammed Al-Boodi here on February 17. The two sides, in particular, discussed opportunities of cooperation in the field of Islamic banking and carrying out sukuk (Islamic equivalent of a bond) transactions.
Recall, the law on Islamic banking in Tajikistan came into force on August 5, 2014.
Tajik lender Bonki Rushdi Tojikiston (Tajikistan Development Bank) was going to convert operations to become a full-fledged Islamic bank in 2015, after it signed an agreement with a unit of the Islamic Development Bank to advice on the transition. However, no specific decisions have been made.
Despite strong growth in the Middle East and Southeast Asia, Islamic finance has lagged in other majority-Muslim countries often due to a lack of specific rules in what are often secular regulatory regimes.
Kazakhstan, Azerbaijan and Kyrgyzstan are among several Central Asian countries creating a more welcoming framework for the sharia-compliant banking industry.
Islamic banking is a banking activity that is consistent with the principles of Sharia and its practical application through the development of Islamic economics. Sharia prohibits the fixed or floating payment or acceptance of specific interest or fees (known as riba, or usury) for loans of money. Investing in businesses that provide goods or services considered contrary to Islamic principles is also haraam ("sinful and prohibited"). Although these principles have been applied in varying degrees by historical Islamic economies due to lack of Islamic practice, only in the late 20th century were a number of Islamic banks formed to apply these principles to private or semi-private commercial institutions within the Muslim community.
Islamic banking has the same purpose as conventional banking: to make money for the banking institute by lending out capital. But that is not the sole purpose either. Adherence to Islamic law and ensuring fair play is also at the core of Islamic banking. Because Islam forbids simply lending out money at interest, Islamic rules on transactions (known as Fiqh al-Muamalat) have been created to prevent it. The basic principle of Islamic banking is based on risk-sharing which is a component of trade rather than risk-transfer which is seen in conventional banking.
Islamic banks reportedly have more than 300 institutions spread over 51 countries, including the United States through companies such as the Michigan-based University Bank, as well as an additional 250 mutual funds that comply with Islamic principles.
