ALMATY, Kazakhstan: Bonki Rushdi Tojikiston (BRT) has signed an advisory services agreement with the Islamic Corporation for the Development of the Private Sector (ICD), the private sector arm of the Islamic Development Bank (IDB) Group to process and support its conversion into Shariah-compliant operations.
The agreement is designed to develop an advisory process to effectively deliver full conversion by also identifying challenges and addressing impediments.
The ICD will dedicate seven key teams across the full conversion process in areas of project management, Shariah compliance, treasury, accounting, human resources, information technology, marketing and legal framework.
“We are delighted to support one of the leading banks in the sector in its initial move toward Islamic operations and we believe this will open the door to numerous other operators identifying the opportunities inherent in the Shariah compliant financial system,” said Khaled Al-Aboodi, CEO of ICD.
Tojidin Pirzoda, chairman of the Supervisory Board of CJSC Bonki Rushdi Tojikiston, said Islamic banking was one of the positive methods of products and services of any bank. He emphasized the enormous contributions by Islamic banks in financing small and medium-sized businesses.
In October 2014 meeting in Dushanbe, the management of CJSC Bonki Rushdi Tojikiston decided to adopt the principles of Islamic banking.
BRT is hoping to become the leading platform in Tajikistan to provide customers with new banking products without charging interest. The bank is studying the experience in the implementation of Islamic banking principles in the banking systems of the European Union, the US, China, Russia, Azerbaijan, Kyrgyzstan and Kazakhstan.
Experience shows that in spite of the existing demand for Islamic banking products, they are not sufficiently represented in the banking system of Tajikistan. Currently, the majority of Tajik banks are inclined to adopt Islamic banking principles.
Tajikistan adopted laws allowing Islamic banking in the country in July 2014 and the National Bank of Tajikistan has established a working group to draft legislative amendments to organize the mechanism of Islamic banking regulations. The work is expected to complete by the end of the first half of 2015.
Bonki Rushdi Tojikiston was founded in 2006 and it was licensed to conduct banking transactions based on a National Bank Board of Directors' resolution on Sept. 19, 2006. Today BRT is represented practically in all regions of Tajikistan. It currently operates 10 branches offering all banking services, 35 Centers of Bank Services (CBS) and 30 exchange offices.
The Islamic Corporation for the Development of the Private Sector (ICD) was established in November 1999 to promote economic development of its member countries in accordance with the principles of the Shariah through private sector development. ICD encourages the establishment, expansion and modernization of private enterprises through financing private sector enterprises or projects. Projects are selected on the basis of their contribution to economic development considering factors such as creation of employment opportunities and contribution to exports.
ICD also provides advice to governments and private sector groups on policies to encourage the establishment, expansion and modernization of private enterprises, development of capital markets, best management practices and enhance the role of market economy.
