ASTANA – Government officials and Islamic finance leaders discussed the state of Islamic finance in Kazakhstan July 4 on the first day of the Islamic Economy Forum.
The forum is part of the July 3-5 Astana Finance Days at the Congress Centre in Astana.
Leading Islamic financial institution representatives highlighted Islamic finance developments and the role of globalisation, cooperation, digitisation, trade, governance and infrastructure in Islamic finance at a forum session titled Islamic Finance: Next Big Step.
Dubai Islamic Bank Group Chief Executive Officer Adnan Chilwan highlighted three areas that will drive Islamic finance in the next two decades.
“One is globalisation; more and more geographies are merging into the market. Globalisation is not only about non-Islamic countries that are coming into the industry, but also Islamic countries that are willing to become a hub of Islamic financial industry. There are countries that are trying to become a hub of Islamic finance within a specific region, Kazakhstan in Central Asia, Tatarstan in the Russian Federation, Malaysia in South East Asia, UAE in the Middle East. These countries play a catalyst role within their geographies in bringing Islamic finance the way it should be,” said Chilwan.
“The next key step is the collaboration of regulators, government, market actors and the private sector. The third area is digitisation that is going to be a major driver in the Islamic finance industry,” added Chilwan.
“The further stage in the industry is how to sustain the development that Islamic finance has achieved. The question is how to catch up with the technology, how to regulate and how to build the capacity,” said Bello Lawal Danbatta, Islamic Financial Services Board (IFSB) secretary-general.
“The future of Islamic finance is to be proactive, engage into research with new digital innovations and developments as well as collaborate in areas in which we do not have a capacity and work together. This is our next big step,” said Danbatta.
Kazakhstan has the potential to be the Islamic Finance hub in Central Asia and be a bridge with the rest of the world, Danbatta noted.
The country is already a major player in the global Islamic finance industry, said Hajjar.
“As Islamic finance grows around the world ($2.2 trillion), I expect that Islamic finance will grow in this country and throughout the region. I am confident that Islamic finance in the global economy will play a key role through long-term sustainable investment, such as with the sukuk tool,” said Hajjar at a plenary session attended by Kazakh Prime Minister Bakytzhan Sagintayev.
Islamic finance has emerged as a tool for financing development worldwide, including in non-Muslim countries. The Islamic finance industry has expanded rapidly over the past decade, growing at 10-12 percent annually, according to the World Bank.
The session finished with the signing of agreements and memorandums.
Astana International Financial Centre (AIFC) Governor Kairat Kelimbetov and Hajjar signed a technical assistance agreement to develop the Islamic Finance Master Plan.
Kelimbetov and Dubai Multi Commodities Centre Executive Chair Ahmed Bin Sulayem signed a memorandum of understanding.
Kelimbetov and Tatarstan Investment Development Agency Chief Executive Taliya Minullina also signed a memorandum of understanding.
Astana Financial Services Authority Chief Executive Stephen Glynn and Financial Regulatory Authority of Egypt Chairman Mohamed Omran signed a memorandum of understanding for consultation, cooperation and information exchange.
The event was also attended by Tatarstan President Rustam Minnikhanov.