Kyrgyzstan: Compliance with banking legislation, Islamic banking department in accordance with AAOIFI Islamic Sharia standards

Abstract

The government of Kyrgyzstan has introduced Islamic banking without a legislative base. Later, as in Kazakhstan, it legalized Islamic banking, making the existing bank code illegal in Islamic banking. The National Strategic Plan of the Government of Kyrgyzstan for a sustainable economy contains important provisions for Islamic finance to achieve the goals of a sustainable economy. The whole of the above the research should be analyzed and found out whether the banking legislation of Kyrgyzstan, which is part of Islamic finance, complies with the AAOIFI Sharia standards. Since the Islamic banking sector is at an early stage of development, the creation of a competitive financial sector is attractive to investors and it is possible to attract funds for the development of the real sector of the Kyrgyz economy with the help of the Islamic banking.The reasons for the emergence of Islamic banking are the prevention of future financial crises and the construction of a stable economic system.Some Central Asian countries have developed laws on Islamic banking and have made changes to existing banking legislation. Kyrgyzstan is one of the two Central Asian countries that have implemented Islamic banking, out of the way of the current banking legislation.