Kyrgyzstan introduces Islamic banking legislation

The country’s parliament has approved legislation enabling all commercial banks in Kyrgyzstan to operate according to Shari’ah principles. Until now, only one bank there, EcoBank, has had an Islamic window (NewHorizon, April–June 2007). It was initiated as a pilot project in the country’s banking sector and was issued an authorisation by the financial authorities to apply Islamic principles of finance (within the confines of the pilot project).

Now the regulators are hopeful that with the adoption of the new laws more financial institutions will move into Islamic finance. According to the Marat Alapaev, chairman of the National Bank of Kyrgyzstan (the country’s central bank and regulator), the introduction of Islamic banking in Kyrgyzstan alongside its conventional counterpart will enhance the range of products and services, facilitate competition in the banking sector and develop the country’s financial system as a whole. National Bank of Kyrgyzstan will be responsible for issuing licences to Shari’ah-compliant financial institutions, as well as supervising and regulating their activity.

A similar move has been recently made by Kyrgyzstan’s neighbour, Kazakhstan, with the president approving a range of amendments and additions to the existing legislation to accommodate Islamic finance. 

Link:
http://www.newhorizon-islamicbanking.com/index.cfm?section=news&action=view&id=10752