OREANDA-NEWS. August 13, 2014. As requirement to investments meeting sharia norms is increased in comparison with the previous year, the International Bank of Azerbaijan (IBA) is planning to increase the general amount of investments. Bahram Guluzadeh the director of Islamic Banking Department of IBA informed Trend on this matter on Wednesday.

According to his words, today the general amount of funds involved from Islamic financial institutions by IBA is about 218.7 million. “The Bank regularly negotiates to involve additional funds. But the Parties will announce the final amount after agreeing on terms of the contract “.

B. Gurbanzadeh said that, IBA shall not stop works on involving external debts on Islamic Banking in the country. “But there are obstacles in involvement of investments of great amount and all of these are the results of lack of legislative base in the field of Islamic Banking in our country. It is hard to direct the permanent flow of investments in the aimed direction without legal framework. There is always a necessity of structuring the new products and services which increases the expenses of the bank and influences the cost of investments”.

The head of the department said that, according to the information of 1 July of this year the share of Islamic Banking in the general loan portfolio of IBA reached 5.695 billion manats which is three percent.

According to his words, the International Bank of Azerbaijan possesses great plans on expansion the line of Islamic products. He said: “The Bank is also going to issue a new Islamic plastic card “Murabaha” nowadays. This is a trade discounts card. The holder of the card can make shopping in the chain of retail shores that serves in the IBA. The holder of the card is entitled with discounts and getting the line of interest-free loan. This is the third product of the Bank in the line of Islamic plastic cards after the cards of “Gibla” and ”Jasmine”.

B. Gurbanzadeh added that, this is the activity of the future to enlarge the line of Islamic products  by means of the branches of the IBA in abroad. “Each market has its features and specific requirements in this period of time. It is not advisable to access the market without an accurate exploration of them and without appropriate products.”

Besides, according to his words, the IBA prepares the new products and services in the frame of lending the real business by means of mortgage financing, investing small and medium businesses.

It must be noted that, the International Bank of Azerbaijan serves in the frame of Islamic Banking since April of the previous year. Today the total amount of assets on Islamic financing is USD180 million. The Islamic Banking Department of the IBA renders services to corporative clients and individuals. An active work on improvement of the legislation is carried out by the Bank. The working group which contains in itself the specialists of the IBA and the representatives of the several ministries and state bodies prepares the package of proposals for regulating Islamic Banking in Azerbaijan.