World Monitor Magazine, Economy WM_April 2019 web version (2) | Page 22

EXPERT OPINION
Guide on
Islamic Banking Products
The history of Islamic banking in Kazakhstan began with the opening
of the Al Hilal Bank Kazakhstan in 2010, the first in the CIS region.
Gordon Haskins,
CEO and Chairman of the
Management Board,
Al Hilal Bank Kazakhstan
During the first seven years, Al Hilal Bank
was focused on working with corporate
customers. Then, in 2017, with the years
of experience and understanding of the
market specifics, Al Hilal launched a
retail business in the cities of Almaty,
Nur-Sultan and Shymkent. Since many
readers may not be familiar with
Islamic banking, we decided to tell
what products are now available for
individuals and how they work.
The basis of deposits with an Islamic
bank is the principle of partnership
and risk sharing, which is agreed
by the bank and depositor. Unlike a
conventional bank, an Islamic bank
offers to invest on a partnership. The
client provides the bank with funds for
management, and the bank, using its
knowledge and experience, invests them
with the subsequent sharing of profits
with the client. Thus, bank depositors
become not just deposit holders, but
investors. Those businesses, in which
the bank directs the funds of investors,
must meet a number of stringent
requirements of profitability, reliability
and compliance with principles and
rules of Sharia. The careful selection of
projects to be funded by Al Hilal Bank
makes it one of the most reliable banks
in the country. Moreover, Al Hilal Bank is
part of an international group with high
investment-grade credit ratings from
Fitch and Moody’s.
A Mudaraba deposit is a key product
of investing in Islamic banking, where
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world monitor
profits are derived from investing in the
businesses of Kazakhstan's economy.
The professional team of the bank is
engaged in the search for and careful
analysis and selection of projects.
The resulting return on investment is
distributed between the bank and the
client in proportions depending on the
amount and term. At the same time,
the profit received by the client may
be higher than from deposits with
conventional banks. It is also important
that the client receives a profit on such a
deposit on a monthly basis. In order to be
confident in the choice of this investment
tool, before making a decision, the
client may familiarize himself with the
information on the historical profit rate
of the product (which is available on the
bank’s website).
Conditions: Contribution of $500 or
150,000 tenge, from 1 to 36 months.
Since the launch of Al Hilal Bank’s
retail business, historical rates of
Islamic deposits in dollars show the
highest market returns.
A Wakala deposit is another investment
tool in Islamic banking. Here, a customer’s
funds are also directed to the financing of
business projects that have undergone a
thorough analysis. The bank determines
the level of expected profitability
depending on the amount and term. The
client receives the profit at the end of the
term of the investment deposit.
Conditions: Contribution from $500 or
150,000 tenge, from 1 to 24 months.