The Ministry of Finance of Russia has approved the idea of introducing Islamic banking. It goes about a type of banking activity that assumes the absence of any interest income. The decision of the department to support the bill was announced by the Deputy Head of the Ministry Aleksey Moiseev.
“We support […] There are reviews from three departments, we are bringing them together now, I hope the review will be submitted [to the State Duma] in the near future,” the Deputy Finance Minister said.
The idea of introducing Islamic banking in Russia against the background of the introduction of Western sanctions and the mass withdrawal of foreign companies from the local market became known in July. According to the draft of the authorities, non-credit financial organizations of a new type–partner financing organizations will be able to provide such services.
They will be able to attract funds from citizens and legal entities and invest them in projects that comply with the norms of Islamic law on a partnership basis, which generally resembles trust management. In addition, they will be able to provide cash loans without subsequent remuneration, finance the company’s trading and production activities by participating in its authorized capital, as well as provide guarantees.
The Central Bank will regulate the work of these organizations. The pilot project is planned to be launched in Dagestan, Chechnya, Bashkiria, and Tatarstan.