International Bank of Azerbaijan (IBA), the country's largest lender, is preparing to launch a separate sharia-compliant banking unit as the former Soviet state prepares an Islamic banking law slated for next spring. 

A stand-alone unit would allow IBA, 50.2 percent owned by Azerbaijan's Ministry of Finance, to more than quadruple its Islamic financing business in the country, Behnam Gurbanzada, IBA's director of Islamic banking, told Reuters. 

"IBA is working on developing new products as well as establishing a platform for a separate, fully sharia-compliant unit," Gurbanzada said. 

IBA, which holds 40 percent of banking assets in Azerbaijan, has thus far extended $180 million of Islamic financing in the country; after legislation is passed, this could increase to as much as $750 million within a year, he added. 

The bank currently offers sharia-compliant products through an Islamic window, a practice which allows conventional lenders to provide Islamic financial services as long as client money is segregated from the rest of the bank. 

A separate unit could help increase the appeal of Islamic banking among retail clients, in a country where an estimated 93 percent of the population of 9 million are Muslim. 

Bakudaily.Az