Islamic Windows: A Strategic Opportunity for Banks in Central Asia
Islamic finance is gaining momentum across Central Asia — and regulatory developments are beginning to reflect this shift. Kazakhstan has recently released updated legislation on banks and banking operations, introducing provisions that allow conventional banks to establish Islamic finance windows. This represents an important step in developing the country’s Islamic finance ecosystem.
So what is driving this growing interest?
1️⃣ Rising demand for Shariah-compliant finance Central Asia has a predominantly Muslim population — close to 90% in some countries — creating strong demand for financial products aligned with religious and ethical principles.
2️⃣ Cost-effective access to new customer segments Islamic windows allow conventional banks to offer Shariah-compliant products without creating a fully separate Islamic bank. This provides a practical way to test market demand while leveraging existing infrastructure.
3️⃣ Increasing regional investment Deeper economic ties with GCC countries are encouraging the adoption of Islamic financial instruments. Countries such as Saudi Arabia and Qatar are strengthening engagement with the region through investment, development finance, and commercial partnerships.
4️⃣ Building foundations for Islamic capital markets Developing a Sukuk market requires sufficient Shariah-compliant assets within the banking system. Islamic windows allow banks to gradually build the asset base necessary to support Sukuk issuance and broader capital market development.
However, launching an Islamic window requires careful structuring, governance, and Shariah oversight to ensure credibility and compliance. As the industry evolves, human capital will also be critical — requiring both the development of local expertise and the participation of experienced international practitioners.
By Leilya Shamel, Founder of Argyns Global
Global Islamic finance set to hit $6 trillion in 2026 as industry posts strong double-digit growth.
The global Islamic finance industry is entering 2026 with powerful momentum as total assets surge toward the $6 trillion mark, driven by robust expansion across banking, capital markets, takaful, and a rapidly rising Islamic FinTech sector.
According to a new assessment shared by the AlHuda Centre of Islamic Banking and Economics, global Islamic finance assets climbed to $5.2 trillion in 2025, reflecting 14.9 per cent year-on-year growth.
Islamic banking remains the backbone of the industry, accounting for 72 per cent of total assets - more than $2.7 trillion. Financing grew more than 17 per cent year-on-year in 2025, while deposits expanded by nearly 9 per cent, buoyed by strong activity in the GCC, Asia, and a growing cluster of African markets.
The sukuk market was one of 2025's standout performers. Global issuance surpassed $230 billion in 2024 and continued expanding in 2025, supported by sovereign borrowing needs and infrastructure financing. New entrants - including Tanzania, Zambia, and Kenya - helped integrate Africa more firmly into global sukuk markets.
The fastest-growing segment is Islamic FinTech - now representing 3 per cent of total assets. Digital payments, Shariah-compliant BNPL, embedded finance, and applications of AI and blockchain have enabled the subsector to achieve "regional scale" in several markets, with double-digit transaction growth.
Geographically, Asia and the GCC still dominate, jointly accounting for more than 50 per cent of Islamic finance assets. But Africa is now the fastest-growing frontier. Europe, too, is showing renewed interest, with Italy, Switzerland, Portugal, and the Netherlands exploring Islamic banking frameworks.
Khaleej Times
The Gulf Turns East: How Central Asia Became a New Financial Frontier
The Islamic Development Bank (IsDB) has invested $9.1 billion across CIS countries, with around 60 percent directed to Central Asia. This growing involvement has the potential to reshape the region’s financial landscape and accelerate modernization.
Among the most active players is the United Arab Emirates. First Abu Dhabi Bank (FAB), the UAE’s largest lender, has become a key arranger of a green loan for Uzbekistan’s Zarafshan Wind Power Project, a 500-megawatt facility – the largest renewable energy project in Central Asia. In 2025, the Eurasian Development Bank (EDB), headquartered in Almaty, placed 200 million dirham (approximately $54 million) in bonds on the Abu Dhabi Securities Exchange with FAB’s support, opening a new liquidity channel between Central Asian issuers and Gulf capital markets.
Saudi Arabia is pursuing a similar path through development and export finance. The Saudi Export-Import Bank (EXIM) has strengthened cooperation with Kazakhstan’s Development Bank and signed a memorandum with Tajikistan’s State Unitary Bank (AFESD) to expand access to Saudi exports. Through the Saudi Fund for Development (SFD), Riyadh has extended concessional loans, including $30 million to Tajikistan for the construction of the Kulob Ring Road.
Qatar, meanwhile, is steadily increasing its financial footprint. In 2024, the Qatari Lesha Bank acquired Kazakhstan’s Bereke Bank JSC for 65 billion Kazakh tenge ($134 million) – marking the first full acquisition of a Central Asian bank by a Gulf investor. The Qatar Fund for Development (QFFD) allocated $50 million to Tajikistan for the Rogun Hydropower Project and announced plans to participate in gas processing and hydropower ventures in Kazakhstan and Turkmenistan.