Azerbaijan’s Central Bank has prepared and submitted to the government a legislative package designed to establish a legal basis for Islamic financial products.
Central Bank Director General Shahin Mahmudzade announced the step at the Third Islamic Finance Forum in Baku, according to Vesti Baku.
Mahmudzade said the package covers five principal products, including three active products and two passive products. The proposed framework is intended to give market participants legal certainty, set clear operating rules and protect consumers’ rights.
Sukuk and Takaful Planned for a Later Phase
The Central Bank plans to move gradually to capital-market instruments such as sukuk and takaful after the initial products are introduced. Officials say the instruments could broaden long-term funding sources and strengthen the connection between financial markets and the real economy.
The initiative follows earlier preparatory work on amendments to Azerbaijan’s civil, tax and financial-sector laws. Trend reported in February that the Central Bank was preparing to send proposed Islamic banking amendments to the government. Report said on Oct. 15 that draft regulatory acts had been prepared and sent to relevant state bodies.
No timetable was announced for the government’s consideration of the latest package or for legislation to take effect. Its submission does not mean the proposed rules are already in force.