Building a Successful Islamic Banking Window in Kazakhstan: A Practical Roadmap for Banks Entering the Market

Introduction

Kazakhstan is entering a new stage in the development of Islamic finance. Following the adoption of the new Law “On Banks and Banking Activities” in December 2025, banks holding a universal licence may establish Islamic banking windows, allowing Shariah-compliant products to be offered alongside conventional banking services. This creates a new route for market entry while supporting diversification of the banking sector and broader access to Islamic financial products. kazakhstan-islamic-banking-wind…

The market opportunity is significant. AIFC and the Islamic Development Bank Institute estimate potential demand for Islamic retail financing at more than KZT 3.9 trillion, while Islamic deposits could reach KZT 2.8 trillion. Yet Islamic banking remains at an early stage: the country’s three Islamic banks accounted for only around 0.5% of total banking sector assets in 2024, leaving substantial room for growth.

This report provides a practical roadmap for banks considering an Islamic banking window in Kazakhstan, focusing on the governance, operational, risk-management and technology foundations required to build a credible and scalable Shariah-compliant business.

Key Findings

Governance must come before product launch

A successful Islamic banking window requires more than Shariah-compliant products. Governance must be embedded across the institution from the outset, with an independent Shariah Supervisory Board, dedicated internal compliance capability and clear accountability across business, compliance and audit functions. The report emphasises a three-lines-of-defence model for maintaining Shariah compliance after products are launched.

 

Operational separation is a structural requirement

Islamic funds must be clearly segregated from conventional banking activities. Separate ledger structures, transparent profit and cost allocation, effective reporting and SSB oversight are essential to ensure that Islamic deposits are deployed only into Shariah-compliant assets and activities. Weak segregation can create financial, regulatory and reputational risks.

 

Start focused, then scale

New entrants should begin with a limited number of well-established products rather than launching a broad portfolio immediately. The report identifies Mudarabah and Wakalah investment accounts, together with Murabaha and Ijara financing, as practical starting points. Expansion should follow once governance, systems, expertise and operational controls have been proven in practice.

 

Digital-first Islamic banking creates an opportunity to leapfrog

Kazakhstan can build Islamic banking windows using modern technology rather than adapting decades-old legacy models. AI can support onboarding, compliance monitoring, fraud detection and financing decisions, while blockchain and tokenisation may create new opportunities in asset-backed finance, sukuk, trade finance and real-world assets. The report stresses, however, that technology must complement — not replace — governance, human judgement and Shariah oversight