Gurbanzada is also the deputy director of strategy development and marketing at International Bank of Azerbaijan (IBA). In 2009, he proposed to the board of the bank the creation of a working team to analyze the Islamic economic system and evaluate opportunities for Islamic banking in Azerbaijan, which the group began following its establishment. In 2010, the bank approved the development of Islamic banking in IBA
Could you provide a brief journey of how you arrived where you are today?
I got acquainted with Islamic banking in 2002. I was working in the investment department of
IBA for two years when the bank decided to implement Islamic financing.
In 2003, we became the first bank in Azerbaijan which attracted a line of financing from the Islamic Corporation for the Development of Private Sector. It was a new type of business for us and we saw it as something unconventional and difficult as well.
After analyzing the Islamic economy and its practical implementation, we found that Islamic banking is a very constructive model for a developing country.
The main idea was to implement Islamic banking as an alternative to conventional banking. Additionally, 93% of our population is made up of ethnic Muslims, while there is also regular demand for liquid investments. In June 2011, the bank announced a tender for a consultancy company which will, together with the Islamic banking team, create a segregated unit within the bank to start up its Islamic banking activities.
What does your role involve?
I am involved in the development of new products and services.
IBA is the country’s biggest bank and it is an engine of the local banking system. Thus, the development of innovation is a significant part of our banking strategy. At present, we are working on the establishment of a segregated Islamic banking unit.
What is your greatest achievement to date?
My greatest achievement is having the opportunity to develop Islamic banking in Azerbaijan.
Which of your products/services deliver the best results?
Azerbaijan’s high economic growth during 2006-2008 was attributed to the large and growing oil exports, but some non-export sectors also featured double-digit growth, spurred by growth in the construction, banking, and real estate sectors.
In 2009, economic growth remained above 9% even as oil prices moderated and growth in the construction sector cooled. We have not had the opportunity to implement a full range of Islamic products and services. However, installment sale and
Ijarah products are for project financing.
What are the strengths of your business?
We do our best to fulfil the bank’s mission which is to significantly contribute to the stability of the country’s banking system, and socio-economic development.
At the same time,
IBA is a universal and modern-technology-oriented bank which effectively creates opportunities for individuals and organizations. Hence, our success is based on the professionalism of the management and staff, trustworthy relations with clients, innovations and a wide business geography.
What are the factors contributing to the success of your company?
We concentrate on innovation, marketing, customer services and efficiency. Furthermore, we are investing in staff in order to secure high level of services. We specially focus on innovations in areas of Islamic banking. We are also planning to expand our services in our subsidiaries in Russia and Georgia.
What are the obstacles faced in running your business today?
The lack of regulation does not allow fully fledged Islamic banking products and services. The present banking law does not forbid Islamic banking but neither does it regulate it. There is also a lack of Islamic finance specialists in the country.
Where do you see the Islamic finance industry in the next five years?
The Islamic finance industry has a bright future. In the next five years, I am confident that Islamic banking will be represented in most of the developing markets and the total volume of world Islamic banking assets will step over US$2 trillion. We must also pay particular attention on risk management and common regulatory procedures.
Name one thing you would like to see change in the world of Islamic finance.
I would like to see more Islamic financial institutions in developing Muslim countries such as Azerbaijan, Kazakhstan, Turkey, Tatarstan, Kyrgyzstan, and Uzbekistan. Bankers and theologians should work out a common Islamic banking model which will be much easier to implement.