Kazakhstan’s First Digital Islamic Bank Deploys Services, Looks Turkey, Russia | Salaam Gateway



Kazakhstan’s first digital Islamic bank was recently launched, giving Sharia-compliant finance a boost in the country’s growing Islamic economy.

Tayyab was officially released during Eid Al Adha in late July, according to Ivan Kamensky, co-founder and director of business development for the start-up.

The company has entered into a partnership agreement with Bank RBK, a Kazakhstan-based conventional financial institution that allows Tayyab to access its license and banking infrastructure.

“Our operating company is registered with the Astana International Financial Center (AIFC), but their regulatory framework for consumer banking services does not cover the continent,” Kamenski explained. “To operate in mainland Kazakhstan, you must have a banking license from the Central Bank of Kazakhstan. ”

Kamenski said Tayyab decided to use RBK because it is one of the few banks in the country that has open application programming interfaces (APIs).

Tayyab has internal Sharia advisers and is certified by the Sharia Review Office.

The Islamic neobank launched its first product, a debit card, attracting 6,500 customers in the first weeks of its release in May, according to Kamenski, thanks to national influencers and media coverage. The company aims to reach 70,000 customers over the next year.

The current clientele is predominantly aged 25 to 45, 60% men and 40% women. All are Muslims, but the company hopes to attract non-Muslims, aiming for them to represent around 20% of its customer base.

Digital banking currently offers digital only cards, physical plastic cards, payment and transfer services. All transactions are available in four currencies, the Kazakh tenge, the US dollar, the euro and the Russian ruble. Services are currently free, with the exception of transfers to other banks.

Revenue currently comes from interchange fees and commissions for premium cards which cost around $ 3 each.

The app also offers ancillary services such as prayer time reminders and a zakat calculator, as well as a map function to locate nearby mosques, prayer rooms and halal catering establishments.

Unusually for a digital bank, Tayyab plans to launch a marketplace within the app, in the first quarter of 2022, hoping to take advantage of the growing e-commerce retail market in Kazakhstan. In the first nine months of 2020, the e-commerce market volume grew 93% year-on-year to 382 billion tenge ($ 896.05 million) mainly due to the pandemic and quarantine periods .

“The market will be similar to Amazon selling products such as cellphones, televisions, furniture, both wholesale and retail. We will not sell products that do not comply with Sharia law, ”Kamenski said.

He believes a key competitive advantage for Tayyab is that it will provide Sharia-compliant payments to customers who purchase goods from the app.


There are currently two physical Islamic banks operating in Kazakhstan.

Al Hilal Bank, the Islamic branch of Abu Dhabi Commercial Bank, offers real estate deposits and finance, while Zaman Bank offers mudarabah and wakalah deposit accounts to individuals and businesses. The bank’s shareholders include the Islamic Corporation for Private Sector Development, the private sector arm of the Islamic Development Bank.

In his rearview mirror, Tayyab sees other digital Islamic banks set to enter the Kazakh market in the near future.

The most anticipated is Al Rayan Investment, a subsidiary of Qatari Masraf Al Rayan, which has not yet officially launched. Last year, Al Rayan announced his intention to create a fully-fledged Islamic digital bank at AIFC. The proposed entity would have paid-in capital of $ 10 million and authorized capital of $ 20 million.

Kamenski said customers should choose Tayyab because it is digital and halal while being part of the larger Islamic ecosystem.

“Many new Islamic banks like Al Rayan’s digital Islamic bank will be based at AIFC, which is similar to the Dubai International Financial Center,” Kamenski said. “We have decided to base ourselves and operate in the continental market with RBK.”


Kazakhstan’s Islamic finance market is nascent and operates within a more open banking infrastructure and financial technology framework that depend on the country’s overall policy for the promotion and development of a digital economy.

Against this background, Tayyab’s decision to partner with conventional bank RBK due to its APIs is revealing, as APIs have only started to become available in Kazakhstan in recent years. Open APIs facilitate the market for third-party fintech developers like Tayyab.

Tayyab also faces the lack of awareness of Islamic finance in Kazakhstan. The platform’s marketing slogan is “simple and halal,” but it has been difficult to explain Islamic banking concepts to customers, according to Kamenski.

Despite these challenges, he is confident in the positioning of Kazakhstan as a hub of Islamic finance in Central Asia.

“Although Uzbekistan is doing a lot, Kazakhstan is positioning itself as the center of Islamic finance in Central Asia,” he noted. “The Kazakh government is committed to supporting the industry and developing its national halal economy. “


In addition to conquering the domestic market, Tayyab also has plans for international expansion.

“[Whilst] Kazakhstan [is our] primary market and domestic market; we hope to enter Turkey in the first half of 2022, ”Kamenski said. “We hope to launch around Ramadan and will work with one of the commercial banks there.”

He added that Tayyab was planning to enter the Russian market which has more than 20 million Muslims.

“We are going to provide the same services that we have now: debit card, request for transfers and payments,” he said. “[The] market and investments will be for the second stage.

Looking ahead, Tayyab hopes to start Islamic retail lending within the next six to seven months, as an option to support traders selling in their market.

It is also planned to start offering financing to SMEs after two to three years.

The company sees future income streams from market commissions, Islamic investments, profit / loss accounts, the purchase of Shariah compliant stocks and LSE sukuk through a brokerage firm.

Tayyab hopes to break even by 2023.

The company is currently running out of steam and is planning a roundtable that it hopes to be able to complete by the end of 2021, according to Kamenski.

“The funding will be used to acquire the generation of potential customers, the market and the costs of banking setup in Turkey and Russia,” he said.
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