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August 17, 2006 -- Reports from Kyrgyzstan say the government could introduce Islamic banking as part of a pilot project with the Saudi-based Islamic Development Bank (IDB).
The website 24.kg says the idea was floated at an August 16 government meeting chaired by Prime Minister Feliks Kulov.
24.kg quotes Kyrgyzstan's National Bank Chairman Marat Alapaev as saying Islamic banking principles could be introduced in the country only as an experiment because of what he called the "fundemantal secular character" of Kyrgyzstan's loaning system.
The purpose of Islamic banking is identical to that of traditional banking, except that it operates in accordance with the rules of Shari'a, or Islamic law.
Under Islamic banking rules, interests and usury are prohibited. The system also prohibits trading in financial risk and bans investing in businesses that are considered "haram," or unlawful in Islam.
The IDB, which has its headquarters in Jeddah, Saudi Arabia, was set up in the early 1970s to promote Islamic banking worldwide.
The financial group has currently 56 members, including the five Central Asian countries of Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan.