Writer: Muhammad Zubair Mughal


Islamic banking and finance total volume has crossed $2.6 trillion globally. The growth of the Islamic banking and finance volume in different continents and areas is continuously with the positive node. Due to the reason, total 2,500 Islamic banking and financial institutions are working in every populated continent including both Muslims and non-Muslim countries. In the current era, Islamic banking and finance started in 1960s from Egypt and Malaysia and dramatically spread over the Middle East, Africa, Europe and other countries. The growth of this phenomenon swiftly increased in Middle East, South and East Asia whereas in some areas the growth of the industry was comparatively slow as Northern African (Tunis, Morocco etc.), Central Asian and Balkan countries. But keeping in view the Islamic banking and finance industry initiative was taken very late in Commonwealth Independent States (CIS) countries and its growth indicate that CIS countries are the emerging Islamic banking and finance market. The delay for Islamic finance initiative in CIS countries would be Russian influence but unstable Russian relations with Europe and decreasing oil prices compelled Russia to get benefit from the best financial alternative of Islamic banking and finance. This Russian policy geared-up Islamic banking and finance industry in CIS countries.

In 1992 the CIS organization was established. Total population of CIS countries is estimated 75 million which is a good news for growing Islamic banking and finance industry. CIS countries’ list consist of 10 countries which includes Kazakhstan, Uzbekistan, Tajikistan, Kyrgyzstan, Turkmenistan, Azerbaijan, Russia, Armenia etc.


In CIS countries, the Islamic banking and finance market can be divided into three parts. At first, there are countries (Kazakhstan, Uzbekistan, Kyrgyzstan and Azerbaijan) where the growth speed of Islamic banking and finance industry is satisfactory and these countries want to promote this sustainable financial alternative. Secondly, there are countries (Tajikistan, Turkmenistan and Russia) where the Islamic banking and finance industry exist with low growth rate. At final there are countries like Armenia, Ukraine, and Belarus etc. where there is no initiative taken so far. However, overall Islamic banking and finance position in CIS countries is encouraging.

If we want to determine about the Islamic finance leader in CIS countries, the credit goes to Kazakhstan where the Islamic banking and finance was started in 1992 but the growth was not phenomenal. After the recent financial crises in 2008 Islamic banking and finance again get a momentum with appropriate support of government institutions. Currently, 7 full-fledged Islamic banks and Islamic banking windows are operating in the country. Takaful, Islamic leasing (Ijarah) and Islamic micro-financial institutions are also working in the country. The recent establishment of Astana International Financial Center (AIFC) caused innovation in Islamic financial industry in the country.

Azerbaijan comes after Kazakhstan where the Islamic finance history is as old as in Kazakhstan but unfortunately, Islamic finance industry in Azerbaijan could not get the attention of government. Although there is no full-fledged Islamic bank in the country but 4 Islamic banking windows are working in the country. Whereas, under ICD- IsDB supervision one Islamic leasing company offering Ijarah products to its clients.

Uzbekistan secured its positive position for Islamic finance industry in CIS countries after considerable initiatives taken by the new president Shavkat Mirziyoyev. Three Islamic banking windows are operational and accepting deposits on Shariah bases. Few Islamic leasing companies also offering Ijarah services. Kyrgyzstan is the only country in CIS where the Islamic banking law has been approved from the parliament in 2011 and one conventional bank is in the process to be full-fledged Islamic bank in near future.


The most important factor of the growth of Islamic banking and finance industry in CIS countries is the Islamic Development Bank’s projects whereas, ICD also has huge investment for Islamic banking and Islamic leasing avenues in CIS countries which includes Azerbaijan, Kazakhstan, Uzbekistan, and Kyrgyzstan etc.

The writer has started putting his research, advisory, consultancy and capacity building services in CIS countries for Islamic banking and finance industry from 2006. In this connection he has conducted various capacity building and training workshops and arranged conferences. He is hopeful that the volume of Islamic finance industry will increas by 100% in next five years which also will strengthen global Islamic finance industry. AlHuda CIBE is going to organize one more Islamic banking and finance conference of its kind in Tashkent, Uzbekistan on 2nd May 2019. The CIS Islamic Banking and Finance Forum will gather the CIS Islamic finance industry specialists and stakeholders on a single platform to promote Islamic banking and finance phenomenon.

The writer is offering his advisory and consultancy services in different countries of the world as Global CEO of AlHuda Center of Islamic Banking and Economics (CIBE) from last 15 years.