Azerbaijan to launch Islamic banking products next year

BAKU, Azerbaijan (MNTV) — The Central Bank of Azerbaijan (CBA) announced plans to introduce Islamic banking products to the local market starting next year, adopting a phased strategy aligned with global best practices, according to CBA official Rustam Takhirov.

Speaking at the Halal Business Forum in Baku, Takhirov said Islamic financial products will initially be offered through the “Islamic Window” model within traditional banks. This pilot approach will help assess market demand and familiarize both customers and banks with the new financial instruments before broader implementation.

“The Central Bank has already defined a roadmap for this phased rollout,” Takhirov said. “The first step involved identifying products for initial implementation through consultations with banks, industry associations, and experts. That stage has been completed.”

He added that work is underway to establish the regulatory framework, including amendments to the Civil Code, Tax Code, and banking legislation. Draft regulations have been shared with the banking sector for feedback and are expected to be finalized by year-end following intergovernmental approval.

The third focus of the roadmap, Takhirov said, is capacity building. The Central Bank has launched training initiatives in partnership with Turkey, Pakistan, Kyrgyzstan, and other countries to strengthen institutional expertise. Notably, Azerbaijani regulators are undergoing specialized training with the Central Bank of Pakistan.

Once the regulatory groundwork is complete, banks will be permitted to launch select Islamic products under the Islamic Window model. The CBA will monitor the rollout, assess results, and consider introducing additional services and regulatory improvements.

“We are ready to cooperate with all local and international partners,” Takhirov said. “We are confident that Islamic banking products will be available in Azerbaijan starting next year.”