Islamic Banking Business

Islamic Banking Business

Islamic Banking Business

Islamic Banking Business means providing financing or making Investments by entering as principal or agent into any Islamic Financial Contract while raising funds for those activities through either or both of the following:

  1. raising, accepting and managing funds or money placements;
  2. managing Unrestricted Profit Sharing Investment Accounts (UPSIA); provided that all such activities are carried out in a Shari’ah-compliant manner.

 

General requirements

 

Requirements


Minimum threshold


Authorisation Fee (paid once)

15 000 USD

*According to AIFC Fees Rules 5.1.1., the application may not be regarded by the AFSA as submitted, and therefore ready to be reviewed, until the fee has been paid in full.

Therefore, when the application is ready for submission, please send us a completed request for invoice (please follow the link to download the form) and after that we will issue the invoice for payment. If the payment to be made by a natural person, then please provide a copy of his/her ID as well.


Registration Fee (paid once)


Registration fee is 300 USD (paid once) if you apply via the self-service portal and 500 USD (paid once) if you apply on paper via [email protected].

*AIFC Fees Rules


Supervision Fee (annually)


n/a

*AIFC Fees Rules


Minimum Capital Requirement


  • An Islamic Bank’s total Capital Resources are defined as the sum of its Tier 1 Capital and Tier 2 Capital. The categories and elements of regulatory Capital, and the limits, restrictions and adjustments to which they are subject are set out in this Chapter.
  • Capital supports an Islamic Bank’s operation by providing a buffer to absorb unexpected losses from its activities and, in the event of problems, it enables an Islamic Bank to continue to operate in a sound and viable manner while the problems are resolved. Capital management must be an integral part of an Islamic Bank’s enterprise-wide risk management process and must align an Islamic Bank’s risk tolerance and risk profile with its capacity to absorb losses.

*In accordance with the modification notice issued by AFSA (AFSA Notice № AFSA-Q-OA-2020-0028) the Base capital requirement for an Islamic Bank is defined as 5 million USD. The notice remains effective until 1 November 2023. 

*AIFC Islamic Banking Business Prudential Rules 4 

 *AFSA NOTICE № AFSA-Q-OA-2020-0028 ON MODIFICATION FOR ISLAMIC BANKS AND ISLAMIC FINANCING COMPANIES

*AFSA NOTICE № AFSA-Q-OA-2023-0007 ON GRANTING CLASS MODIFICATIONS TO ISLAMIC BANKS AND ISLAMIC FINANCING COMPANIES


Liquid Assets Requirement


Liquidity Coverage Ratio must be calculated in accordance with AIFC Islamic Banking Business Rules 10.25.

*AIFC Islamic Banking Business Prudential Rules 10


Appointment of Internal and External Auditor


Required

*AIFC General Rules 5.5.1.

*AIFC Financial Services Framework Regulations 109.


Organisational structure 


  • Appointment of a Board of Directors;
  • Appointment of approved and designated individuals (SEO, Finance Officer, Compliance Officer, MLRO and a deputy MLRO);
  • Appointment of committees within the company (Risk Committee, Investment Committee, Compliance Committee etc.)
  • Shari’ah Supervisory Board (at least 3 members);

Policies and Procedures

 


 

Application package

Application Regulated Activities
Supplement Islamic Business
Supplement Banking Business
Application Approved Individual status
Application Designated Individual status
Financial projections template
Request for Invoice
Fit and Proper Questionnaire for Controllers

 

Supporting documents

 

  • Incorporation certificate of Parent/head office (if applicable)
  • Board minutes approving establishment of the AIFC entity
  • Résumés/CVs for Controllers that are natural persons
  • Résumés/CVs for the members of the Board of Directors (both executive and non-executive) as applicable
  • Last audited accounts (if applicable)
  • Last audited Group accounts (if applicable)
  • A shareholding chart that depicts how the applicant is related to each of its shareholders (including natural persons) and to its related entities, Subsidiaries, and head office/Branch, as applicable
  • An organisation chart depicting the key appointments and reporting lines and, where applicable, the reporting lines to the Group or head office
  • If the applicant is a start-up evidence of source of funds
  • Evidence, such as non-binding letters of engagement, to support the applicant’s revenue-stream estimations in the financial projections
  • If the applicant is a start-up, a copy of the Shareholders’ agreement
  • Copies of any Board and management committees’ terms of reference
  • A copy of each Controller’s Kazakhstani ID card (if a Kazakhstani citizen or resident)
  • A copy of each Controller’s passport (for non-Kazakhstani citizens)
  • If your Parent is regulated in another jurisdiction provide a copy of its regulatory licence. It must include any restrictions or conditions
  • A copy of the applicant’s interbranch accounting policy (if applicable)
  • Standard Client Agreement
  • List of above-mentioned policies and procedures

*Under AIFC Financial Services Framework Regulations 31 (5), the AFSA may require the applicant to provide additional information reasonably required for the AFSA to be able to decide the application.