National Bank and IDB to establish first Islamic bank in Kyrgyzstan

BISHKEK (TCA) — The National Bank of the Kyrgyz Republic, in partnership with the Islamic Development Bank (IDB), is inviting interested investors to participate in opening a new full-fledged Islamic bank in Kyrgyzstan, the Investment Promotion and Protection Agency of the Kyrgyz Republic said on its website on July 24.

One of the strategic objectives of IDB is to promote and develop the Islamic finance industry globally. One of the direct means of doing that is the participation in the establishment of Islamic financial institutions.

Recently, IDB along with the Government of the Kyrgyz Republic (through the National Bank of the Kyrgyz Republic) have joined efforts to work on establishing the first Islamic Bank in the country. In this context, a market study and a business plan were prepared, which indicated significant demand in this promising market for the first Islamic Bank in Kyrgyzstan.

Islamic Banking and Finance is new in the region and it has a big potential with the growing demand, both in Kyrgyzstan and in neighboring countries. In addition, the National Bank has adopted several regulatory changes to give an equal opportunity for Islamic banks to operate in the country.

IDB and the National Bank are seeking an experienced technical partner who can invest in this project and provide the managerial, technical and governance expertise. The technical partner would put in place the policies, procedures, and IT systems for the bank to run efficiently and effectively. The technical partner would also have board representation.

The targeted capital of the institution is around USD 25 million and with such equity capital, the prospective financial institution would be considered one of the largest banks in the country.

Although the National Bank and IDB are expected to be together majority shareholders, both would not be involved in the day-to-day management of the new bank.

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Times of Central Asia