Yunus Abdulov: Development of Islamic finance requires creation of specialized banking mechanisms

In Azerbaijan, legal preparation in the field of Islamic finance should be supplemented by the creation of appropriate operational and control mechanisms within banks, Executive Director of the Azerbaijan Banks Association (ABA) Yunus Abdulov stated at the 3rd Islamic Finance Forum in Baku, Report informs.

According to him, separate accounting, segregation of funds, and Sharia compliance audits are crucial in this context.

"This requires joint training of lawyers, banking specialists, and Sharia experts. Trust must become the main outcome in customer relations. The product's yield mechanism, obligations, and risks should be explained to the client in simple language," Abdulov noted.

He added that this year, as part of banks' financial literacy initiatives, educational work was carried out covering 3 million people. According to him, effective communication by a bank employee when a client reaches out is just as important as product development.

Abdulov also noted the importance of adapting the experience of Türkiye, Malaysia, and the Gulf countries to local legal and economic conditions.

"Islamic banking and capital market instruments can create an additional financing channel and expand the investor base," he said.