ASTANA – Islamic banking in Kazakhstan has grown significantly over the past years but still accounts for a small share of the financial system. Its long-term value will depend on whether it attracts new investors and channels additional funding into businesses and infrastructure, rather than redistributing existing resources, economist Ruslan Sultanov told The Astana Times.
“The main task in developing Islamic banking in Kazakhstan should not be to achieve a particular share of the banking market, but to create additional opportunities for financing the real sector of the economy,” he said. Mastercard’s September 2026 report, titled Islamic Banking in Central Asia: A Window of New Opportunities, estimates the regional Islamic banking market at approximately $716 million and projects it could reach nearly $2.5 billion by 2028.
For Kazakhstan, the challenge is to turn this growth into additional capital for businesses and long-term investment. According to figures from the National Bank of Kazakhstan cited by Sultanov, the combined assets of ADCB Islamic Bank and Zaman Bank reached approximately 315.3 billion tenge (US$702.9 million) as of Sept.
1, representing around 0.42% of the banking sector’s 75.7 trillion tenge in assets (US$168.7 billion). Sultanov said Islamic bank deposits stood at 39.3 billion tenge (US$87.6 million), or around 0.08% of total banking-sector deposits. According to data from Ranking.kz citing the Islamic Financial Stability Report 2026, Kazakhstan’s Islamic banking assets increased almost 33-fold between August 2010 and August 2026.
Despite this growth, the sector remains small relative to the wider banking system. Sultanov also said Islamic banking assets rose 4.7% between January and September, compared with 6.9% growth across the banking sector. The limited market share reflects the small number of Islamic financial institutions, narrower product offerings and a more limited retail customer base.
Islamic finance is not automatically cheaper than conventional borrowing, Sultanov said, as costs depend on funding, operating expenses and credit risk. Some Islamic products can also be economically similar to conventional debt. “If the development of Islamic banking results only in the redistribution of existing customers and financial resources between conventional and Islamic banks, the overall macroeconomic effect may remain limited,” he said.
Kazakhstan’s banking law, signed on Jan. 16, allows universal banks to conduct Islamic banking operations under their existing licenses, according to the Agency for Regulation and Development of the Financial Market. Banks should keep these activities separate from conventional operations, including through separate accounting and the segregation of assets and liabilities.
Islamic products also require Sharia-compliance oversight. The changes could allow established banks to offer Islamic products without creating separate Islamic banks, potentially expanding access. However, market development will also depend on product availability, specialist expertise and customer confidence.
Deposit protection remains a consideration. Kazakhstan’s Deposit Guarantee Fund says it does not cover deposits placed with Islamic banks, an exclusion that remains under the new banking framework.