A bill has been endorsed by the Russian parliament to implement Islamic banking in regions with predominantly Muslim populations.
This initiative, set to commence on September 1, 2023, and extend for a span of two years, is perceived as a significant stride for Russia, potentially opening the doors for broader incorporation of Islamic banking across the nation.
Islamic banking adheres to Islamic law, known as Sharia, which strictly forbids the involvement of interest, considering it as usury. Rather than relying on interest, Islamic banks utilize profit-sharing mechanisms and leasing arrangements to extend financial services to their clientele.
The four regions engaged in this experiment encompass Bashkortostan, Chechnya, Daghestan, and Tatarstan, all boasting substantial Muslim communities and displaying a keen interest in advancing Islamic banking offerings. The introduction of Islamic banking in Russia is viewed as a strategy to entice foreign investment while bolstering economic growth within these regions with a Muslim majority.
Furthermore, this move is perceived as a means to address the growing needs of the expanding Muslim population in Russia.