ASTANA – The Islamic Financial Services Board (IFSB) held its 12th summit in Almaty on May 18, the first time the summit was held in the Commonwealth of Independent States (CIS), Kazakh TV reported in late May. As Kazakhstan aims to become a regional financial centre, the country hopes to position Almaty as the Islamic finance hub of Central Asia and the CIS.
“We expect Kazakhstan to become one of the leading countries in the Islamic financial services industry,” said Kairat Kelimbetov, chairman of the National Bank of Kazakhstan, addressing the summit. Kelimbetov noted that Kazakhstan joined the ISFB in 2011. “The opening of the Islamic banks on the CIS territory and the issuance of sukuks [Islamic bonds] – all these have been highly viewed by the Islamic finance community,” he said.
Opening the summit online, Kazakh Prime Minister Karim Massimov said Islamic finance is one of the fastest growing areas in global finance, Kazinform reported. Participation in the IFSB gives Kazakhstan effective support in enhancing the standards for Islamic financial institutions in the country, thereby strengthening Kazakhstan’s position as a regional leader in this field, Kelimbetov said. “The global industry of Islamic finance should expand beyond its traditional boundaries to maintain double-digit growth rates, and in this regard, Kazakhstan has become an important partner as a gateway to Central Asia and the CIS,” he said.
Kazakhstan is currently working on amending legislation to let the Kazakh Ministry of Finance to place these types of securities on the stock exchange. The process is expected to roll out over the next 1.5 years.
The volume of bonds placement will depend on the government budget balance, Kelimbetov said. Deputy Chairman of the National Bank Nurlan Kussainov said that Islamic deposits have been defined in the country’s new law on Islamic finance, and that a memorandum of understanding had been signed with the organisation that deals with the development of mini markets for Islamic instruments.
Though Islamic financial institutions are already operating in Kazakhstan and the Development Bank of Kazakhstan was the first in the CIS to issue sukuk bonds, participants noted that a lot of work will need to be done before Kazakhstan can become a leader in Islamic finance. “We have had productive discussions with the chairman of the National Bank of Kazakhstan,” said Secretary-General of the IFSB Jaseem Ahmed, according to Kazakh TV. “Previously, we provided assistance both to the National Bank and the banking sector. And we would welcome a stronger role by the National Bank of Kazakhstan in the framework of IFSB in the future. Therefore, there is so much to be done. And I think we will do it.”
The Islamic Financial Services Board is an international body that sets the standards of the Islamic financial services industry. The Almaty summit was organised with the support of the National Bank of Kazakhstan and intended to help identify the main principles of sustainable development of Islamic finance and its integration into the global economic system.