DUSHANBE, October 9, Asia-Plus — Open joint-stock company (OJSC) AgroInvestBonk, one of Tajikistan’s largest commercial banks, is the first in the country to use principles of Islamic banking, Asia-Plus has learned at AgroInvestBonk’s headquarters in Dushanbe.
Under an agreement signed on September 29, 2007, the Islamic Corporation for the Development of the Private Sector, which is the private sector arm of the Islamic Development Bank (IDB), has provided a $1.5 million financing line, which provides for use of tools of commercial financing in accordance with Islamic banking principles, the source at AgroInvestBonk’s headquarters said.
Thus, AgroInvestBonk is the first bank in Tajikistan financing operations on import of advanced technologies and state-of-the-art equipment for local enterprises in accordance with principles of Islamic banking.
It is the first long-term credit product of the bank, which supposes that maximum period of financing may reach five years with a grace period of up to one year, during which borrower will not pay any commissions.
Use of long-term credit products will allow local enterprises to improve their production opportunities and organize nonstop production.
Founded in 1992, AgroInvestBonk, with headquarters in Dushanbe, has main branches in Khorog, Khujand, Kulob and Qurghon Teppa and 57 other branches across the republic. AgroInvestBonk’s declared capital includes 270,000 shares, valued at 27 million somonis. The face value of one share is 100 somonis.
The first modern experiment with Islamic banking was undertaken in Egypt. The pioneering effort, led by Ahmad El Najjar, took the form of a savings bank based on profit-sharing in the Egyptian town of Mit Ghamr in 1963. This experiment lasted until 1967 (Ready 1981), by which time there were nine such banks in the country.
Islamic banking has the same purpose as conventional banking except that it operates in accordance with the rules of Shariah known as
Fiqh al-Muamalat
(Islamic rules on transactions). The basic principle of Islamic banking is the sharing of profit and loss and the prohibition of
riba´
(interest). Amongst the common Islamic concepts used in Islamic banking are profit sharing (
Mudharabah
), safekeeping (
Wadiah
), joint venture (
Musharakah
), cost plus (
Murabahah
), and leasing (
Ijarah
).
