The first full-fledged Islamic bank in Tajikistan – Open Joint-Stock Company (OJSC) Tawhidbonk – intends to break through internationally.
“|We have created the first Islamic bank in Tajikistan and we intend to build one of the best Islamic banks in the region,” Tawhidbonk top manager Sherali Zardov told Asia-Plus in an interview.
ИЗОБРАЖЕНИЕ Tawhidbonk head Sherali Zardov; photo / Tawhidbonk.
He noted that at the next stage they plan to develop competitiveness and grow business “both through implementing a complex of Islamic finance solutions and introducing the state-of-the-art digital banking services.”
“We realize that we will have to implement the business-plan under difficult economic conditions in the country and in the world as well as under conditions of uncertainty in the banking market,” Tawhidbonk head said.
According to him, the first stage has been completed “as efficiently as possible.” “Our next goal is to transform from national brand into international brand by 2023,” Zardov added.
Recall, OJSC Tawhidbonk, which had been established on the basis of OJSC Sohibkorbonk, was granted the license for banking operations in September 2019.
Sohibkorbonk began converting operations to become a full-fledged Islamic bank in October of 2017. Chairman of Sohibkorbonk Board Sherali Zardov and the Islamic Corporation for the Development of the Private Sector (ICD) chief executive Khaled Al-Aboodi signed a memorandum of understanding (MoU) in Dushanbe in early October of 2017.
By decision of an annual meeting of shareholders OJSC Sohibkorbonk was converted into OJSC Tawhidbonk on June 12, 2019.
The law on Islamic banking in Tajikistan came into force on August 5, 2014.
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.
