DUSHANBE, April 29, 2014, Asia-Plus – A two-day workshop to discuss introduction of Islamic banking in Tajikistan concluded at the National Bank of Tajikistan (NBT) today.

According to Tajik central bank’s press center, the workshop participants included representatives from local financial institutions as well as Zaid Ibrahim & Co., the largest private law firm in Malaysia.

The workshop participants, in particular, discussed a draft law “On Islamic Banking in Tajikistan,” which is being worked out under support of specialists from Zaid Ibrahim & Co.  This draft law reportedly aims at promoting expansion of Tajikistan’s banking system.

Tajik central banks and Zaid Ibrahim & Co. signed an agreement on development of Islamic banking here in November 2012.

Islamic banking is a banking activity that is consistent with the principles of Sharia and its practical application through the development of Islamic economics.  Sharia prohibits the fixed or floating payment or acceptance of specific interest or fees (known as riba, or usury) for loans of money.  Investing in businesses that provide goods or services considered contrary to Islamic principles is also haraam ("sinful and prohibited").  Although these principles have been applied in varying degrees by historical Islamic economies due to lack of Islamic practice, only in the late 20th century were a number of Islamic banks formed to apply these principles to private or semi-private commercial institutions within the Muslim community.

Islamic banking has the same purpose as conventional banking: to make money for the banking institute by lending out capital.  But that is not the sole purpose either. Adherence to Islamic law and ensuring fair play is also at the core of Islamic banking.  Because Islam forbids simply lending out money at interest, Islamic rules on transactions (known as Fiqh al-Muamalat) have been created to prevent it. The basic principle of Islamic banking is based on risk-sharing which is a component of trade rather than risk-transfer which is seen in conventional banking.

Islamic banks reportedly have more than 300 institutions spread over 51 countries, including the United States through companies such as the Michigan-based University Bank, as well as an additional 250 mutual funds that comply with Islamic principles.

Established in 1987, Zaid Ibrahim & Co. is the largest private law firm in Malaysia.  Today, it is the most widely networked firm in Malaysia, with offices throughout the country.  Its successful expansion beyond Malaysian shores began in 2003 and it now has strategically positioned offices in major cities in the ASEAN region, the Middle East and Australia.