The International Bank of Azerbaijan plans to double its Islamic banking operations this year, according to Director of the Islamic Banking Department Behnam Gurbanzade.

"Despite the rapid expansion of Islamic banking in Azerbaijan, reforms in the legislation are needed to spur the growth of the industry further. The adoption of the legislation in the sphere of Islamic Banking will affect in a better opportunity to create a more even environment with conventional banks, as well as give a chance of introducing full range of Islamic Banking products to the customers. Introduction of new products will result in a growth of the market share of Islamic Banking, as well as expanding a list of Bank's customers," Gurbanzade said. "The financial portfolio of the IBA department currently amounts to approximately to $200 million. The IBA is planning to double Islamic financing operations and increase Islamic banking assets to $400 million by late 2014."

Gurbanzade said that a working group of representatives of the Central Bank, the IBA, the Ministries of Economy and Industry, Finance and Taxes, and the Cabinet Ministers will be established to develop amendments to the existing legislation and introduce regulation of banking on Islamic principles.

"We plan to send our proposals to the country's parliament before October," Gurbanzade said.

As for international interest in Azerbaijan's Islamic banking opportunities, Gurbanzade said the IBA has just signed its first deal.

"We are pleased to announce the successful closure and signing of a $120.5 million Syndicated Murabaha Financing Facility by Barwa Bank, Emirates NBD Capital Limited, J.P. Morgan Limited and Noor Islamic Bank PJSC. Proceeds from the facility will be used by IBA to fund its Sharia compliant financing activities in Azerbaijan," Gurbanzade said. "Furthermore, we are in talks with a number of bank groups from MENA with a view to attract financial sources as well as Wakala deposits that meets the Islamic financing requirements. Our goal is to reach $400 million investments in 2014."