The National Bank of the Kyrgyz Republic, in partnership with the Islamic Development Bank (Jiddah, Kingdom of Saudi Arabia), invites interested parties to participate in the opening of a new Islamic bank in the Kyrgyz Republic. The agency for promotion and protection of investments of Kyrgyzstan reports on Tuesday.
As noted, one of the strategic goals of the Islamic Development Bank (IDB) is to promote and develop the Islamic finance industry around the world, including through participation in the creation of Islamic financial institutions.
«For this purpose, the IDB together with the government of the Kyrgyz Republic, in the person of the National Bank, joined forces to create the first Islamic bank in the country, in connection with this, a market study was prepared, according to which there is a significant demand for Islamic financial services, as well as a business plan on the opening of an Islamic bank, «the report said.
The agency notes that over the past few years the economy of the Kyrgyz Republic has demonstrated stable growth. The population of the country is more than 6 million people, of which about 90 percent are Muslims. «It should be noted that the Kyrgyz Republic is a member of the Eurasian Economic Union with a population of 180 million people.The Islamic financial services are new directions in the region, but they have a great potential with growing demand both inside the republic and in neighboring countries,» message.
The National Bank adopted a number of changes to regulatory legal acts to provide equal opportunities to Islamic banks, along with traditional banks.
Currently IDB and the National Bank are looking for technical partners who could act as one of the investors in this project and provide management and technical expertise. It is expected that the technical partner will develop policies, procedures and IT systems for the effective functioning of the bank. The technical partner will also take place on the board of directors of the new bank.
It is assumed that the capital of an Islamic bank will be $ 25 million, so this financial institution will be one of the country’s largest banks. The expected internal rate of return (Equity IRR) is 22-38 percent depending on the size of the capital.
It is planned that the National Bank and IDB will act as shareholders without active participation in the day-to-day management of the bank.