The first investment bank in the Kyrgyz Republic named "Iman" will appear in Kyrgyzstan. Vice President of the Islamic Business and Investment Corporation (IBIC), Valentin Dobrynin, spoke about how it will operate.
Currently, there are no financial institutions in Kyrgyzstan that operate on the principle of Sharia. According to Dobrynin, Kyrgyzstanis today there is a great demand for interest-free loans and other financial services that would work within the framework of Islamic banking.
“Kyrgyz citizens want to buy houses, vehicles, gadgets or start their own business, but so far they are offered only traditional banking mechanisms,” he stressed.
The main task of the new financial institution will be to find a working Islamic bank in the Middle East and start partnership activities with this financial institution.
In the future, the Islamic bank should become the main one in the country.
It will take $30mn to create "Iman" Bank. Most of this money ($25mn) is planned to be received from investors (founders), and $5mn will be allocated by the International Financial Corporation (IFC).
Some $2.5mn will be provided by IBIC. Later, the authorized capital of the banking institution may increase to $100mn.
Are there similar financial institutions in Uzbekistan?
In Uzbekistan, there are two financial institutions operating on the basis of Sharia - the Islamic Development Bank (IDB) and the Islamic Corporation for the Development of the Private Sector (ICRD).
These financial institutions provide financial assistance and advisory services for private sector projects.
What is the Islamic Principle of Finance?
The basic principle of Islamic banking is the division of profit and loss and the prohibition of interest. Money is a medium of exchange and a measure of value.
An Islamic bank, unlike traditional ones, should take precedence over Islamic moral norms and values.
The main means of control of such banks is the Shariah Board. This is an independent structure of the bank.
The functions and duties of the Council are determined by the Bank's charter and the legislation of the country where the given financial institution is located.
All banking processes and operations in an Islamic bank must be approved by the Shariah Board.
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