By Siti Radziah Hamzah
KUALA LUMPUR, Sept 5 (Bernama) -- Kazakhstan's newly established Astana International Financial Centre (AIFC) is keen to attract Islamic finance players in Malaysia to set up operations in the country, which serves as a springboard to the Central Asian region.
AIFC chief Islamic finance officer Sheikh Bilal Khan said Kazakhstan is a green field for Islamic finance players to tap into, especially with increased internet penetration offering financial technology opportunities.
"In Kazakhstan and Central Asia, there is hardly anybody. Kazakhstan has two Islamic banks. It is only starting now because Kazakhstan only got independence in 1991. This country is looking to grow its Islamic banking.
"If Malaysian entities go from here, they will have first mover advantage as nobody from other parts of the world has come yet and (Malaysian entities) will be able to help with trade flows and business investments between Central Asia and Kazakhstan," he told Bernama in an interview recently.
The AIFC was officially launched in July 2018 with special legal status based on English Common Law.
The financial centre is part of efforts to increase the size of Islamic banking assets in the post-Soviet state. Currently, Islamic banking assets constitute less than one per cent of the total banking assets in the country.
Khan said over 230 companies have set up operations in the AIFC, with the target to get 500 companies to register in the centre by 2020.
Currently, Kazakhstan has two full-fledged Islamic banks operating in the country, namely homegrown Zaman-Bank as well as Abu Dhabi-based Al Hilal Bank.
According to the Kazakhstan Financial Sector Development Strategy 2030, the size of Islamic banking assets in Kazakhstan by 2025 is expected to reach 3.0-5.0 per cent of total banking assets and the AIFC will play a significant role in its achievement.
Asked whether Kazakhstan intends to nurture its own Islamic banks, Khan said foreign Islamic finance players which set up base in the AIFC would help to grow and stimulate the local market as well due to Kazakhstan's lack of experience in the industry.
"The market is completely new, what they need right now is experienced international Islamic banks to come in there and help the market because they already have their products structured, experience and knowledge how to structure the market," he added.
Meanwhile, Khan said the AIFC also intends to develop the halal industry in tandem with Islamic finance.
The AIFC is currently commissioning Malaysia-based ZICO Shariah, a shariah advisory service provider, to develop a comprehensive five-year master plan for Kazakhstan to develop its Islamic finance industry.
"It goes hand in hand. An Islamic ecosystem is required to complement the halal business and Islamic finance. This is important. We have the regulatory framework, we are now looking at institutions to come in.
"And the master plan will provide the vision, mission and strategic goals on how we go about. Malaysia has had a lot of success stories so we want to learn from the Malaysian experience," said Khan.