(Trend News Agency) – The International Bank of Azerbaijan (IBA) and Russia’s VTB Bank plan to attract one of the leading banks of Kazakhstan for establishment of a single Islamic bank in the CIS space.

Azerbaijan’s Trend Agency reports with reference to head of the working group on implementation of Islamic banking in the IBA Behnam Gurbanzade (بهنام قربانزاده).

“At the fourth Baku International Banking Conference of the CIS member states, which was held in December, 2011, the IBA was chosen as a platform and a regional centre on development of Islamic financing in the Commonwealth countries. And the work in this direction is underway,” Behnam Gurbanzade said.

According to him, in accordance with the agreements between VTB Bank and the IBA, the Russian bank will use experience of the Azerbaijani specialists and consultants in the field of Islamic banking, and the Azerbaijani bank, in turn, – the VTB’s experience.

“We will unite our efforts by the Financial and Banking Council of the CIS. In the future we would like to attract one of the leading banks of Kazakhstan and create a triple alliance,” he said.

Islamic banking obeys the principles of Islamic law (Sharia) and its practical application which prohibits the fixed or floating payment or acceptance of specific interest or fees for loans of money. Investing in businesses that provide goods or services considered contrary to Islamic principles is also forbidden. While these principles may have been applied to historical Islamic economies, it is only in the late 20^th century that a number of Islamic banks were formed to apply these principles to private or semi-private commercial institutions within the Muslim community which became a captive market for them.