The Agency for Regulation and Development of the Financial Market of the Republic of Kazakhstan published an explanation by Deputy Chairman Dauren Salimbayev on a proposal in the new draft law on banks to introduce “Islamic windows”, allowing conventional banks to offer Islamic finance products as a separate business line within their existing banking licence. The approach envisages a flexible regulatory model and would regulate Islamic windows on principles similar to Islamic banks, including a comparable list of permitted operations. Core requirements include organisational segregation, separate accounting and financial reporting, mandatory regulatory reporting, and suitably qualified staff. Banks would need to adapt accounting, risk management, internal controls and corporate governance, with Islamic-window assets and liabilities recorded separately from conventional operations and shared expense allocation permitted only where clearly delineated. Banks with Islamic windows would initially remain within existing prudential norms, with a possible later move to specialised capital adequacy and liquidity indicators as the segment develops, alongside heightened focus on managing the risk of non-compliance with Islamic finance principles.

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