Islamic banking in Russia. Islamic bank in Moscow

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Islamic banking provides for a certain tandem of norms and values, which are based not only on beliefs, but also on the traditions of the entire Islamic nation. Russian banking and Islamic banking are not only fundamentally different, but also contradict each other at some points.

Islamic banking standards

The financial Islamic system is successfully functioning, starting from the basic standards:

• Loan interest is prohibited. The presence of interest is not only regarded as usury, but is also prohibited by the Koran.
• Speculation is under strict veto. Using problems or someone else's difficulties for your financial interests is prohibited. In particular, the type of earnings in the financial market, which becomes possible as a result of certain difficulties for the state, is considered unacceptable.
• Total veto on gambling, including lotteries.

In addition to these restrictions, both an Islamic bank and its clients are not allowed to invest in companies that provide goods and services that are contrary to the Muslim faith. These can be corporations engaged in the production of alcohol and tobacco, spheresactivities associated with witchcraft. Despite specific laws, Islamic banking is growing worldwide at an average rate of 10-15% per year. In total, there are about 300 institutions in the world in at least 51 states, including the United States.

The desire of Islamic banks to enter the international market

In the past few years, Islamic financial institutions have expressed their desire to actively move into the international market. In the world media, there are more and more reports that the authorized bodies are considering the possibility of establishing and promoting Islamic banks in Russia. It is worth mentioning that there are significant differences between the banking systems of the two states. The main difference between Islamic financial representations is the presence of a ban on the issuance of funds at interest. The main income is generated by the sale of goods in installments at an inflated cost. In Russia, the situation is exactly the opposite. Banks are not allowed to trade in any kind of goods, with the exception of precious metals. The basic principle of Russian banking is lending.

Mutual integration

Against the backdrop of the economic situation in Russia, and also as a result of tough sanctions from America and the European Union, attempts to establish financial relations with Eastern financial institutions are quite natural. At the moment, a likely partnership is limited to words from Russia and negotiations between representatives of the financial eastern structureand representatives of the domestic banking sector. President of the Islamic Financial Institute Ahmad al-Madani keeps saying that the states intend to take a step towards each other in June 2015.

A representative of the eastern financial sector intends to come to Moscow to discuss this issue with the head of the Central Bank Elvira Nabiullina. Islamic banks in Russia are looking to enter the market through local partners. Such a decision can be supported not only by the relevance of financial support for domestic banks, but also by the number of Muslims living in Russia, of which there are at least 20 million. To say more, domestic banks are showing interest in entering the Islamic market. In particular, Sberbank and VTB have already had discussions with authorized persons regarding the opening of their representative offices in the east.

Active actions of Russia - are they?

Islamic bank is a very specific financial institution, and a certain legislative base must be created for its fruitful work. It is this issue that the State Duma is now actively dealing with, due to the fact that the main specificity of the activities of Islamic institutions is the provision of goods by installments. Mutually beneficial partnership between states will become possible only if the ban on trading activities by commercial financial structures is completely cancelled. The Central Bank actively supports the partnership initiative. towards financial cooperationthe Russian government turned around due to the interest in this issue in Tatarstan, which was initiated by colleagues from Malaysia.

Favorable soil

As mentioned above, the State Duma is preparing a bill, authored by Dmitry Savelyev. He proposed amendments, according to which banks will be able to sell goods at a premium to their customers. The relevance of this decision is due to the fact that in Russia there is a fairly large percentage of Muslims who are in dire need of support from financial institutions that correspond to their religion.

It is too early to talk about how Islamic banks work, as the legislative barriers are still at the stage of elimination. Cooperation is supported by the fact that at least two trillion dollars are concentrated in the field of Islamic banking. At the moment, there are only three enterprises operating in Russia that provide services within the framework of Islamic law. These are organizations TNV "LyaRiba-Finance" in Makhachkala, the enterprise "Amal" in Kazan and FD "Masraf".

Positive forecasts of two states

According to preliminary estimates, an Islamic bank in Russia will be very popular not only among Muslims, but also among the indigenous people of Russia, among representatives of other religions. The reason for the alleged popularity of financial institutions lies in their loyal policies. There is no doubt that thousands of people will be interested in financial support, albeit through the purchase of a specificgoods, no additional insurance, no hidden fees and unexpected pen alties. But most importantly, under no circumstances will an Islamic bank sell clients' debts to collection agencies. It can even be assumed that a fairly large part of the clients of domestic financial institutions will make their choice in favor of the eastern partner. You don't need to be an expert in the financial market to understand that a mortgage in an Islamic bank will be provided on more favorable terms than in any domestic one.

The first Islamic financial institution in Russia

The first in its history Islamic Development Bank in Russia has every chance to start its activity by the end of 2015. A financial institution can start its work under the patronage of the Infrastructure Fund under the Islamic Development Bank. According to preliminary estimates, the fund's total capital is $2 billion. The financial institution itself is one of the largest funds in the field of targeted investment in infrastructure projects on the territory of at least 57 states that are members of the IDB.

The creation of the first Islamic bank is planned on a pilot territory, in Tatarstan. This information was provided by Anatoly Aksakov, President of the Association of Regional Banks. At the moment, representatives of the East and Tatarstan are preparing technical and economic grounds that will allow the Islamic bank to enter the domestic market by the end of September 2015. Newthe credit institution will operate according to the standards of an investment bank and on a participation basis. According to media reports, meetings have already been held between representatives of the IDB and representatives of the Association of Russian Banks and Ak Bars. By the way, Ak Bars is the largest participant in the financial market of Tatarstan.

Unsuccessful experience of creating the first Islamic financial institution in Russia

In history there is an experience of when attempts were made to introduce Islamic banking in Russia. It is very interesting that the bank called "Badr-Forte" worked for 15 years. It is worth saying that the financial institution throughout its history of existence had certain difficulties associated with the legislation of the country. At that time, there was no question of modernizing the legislation. The result of this innovation is quite obvious. An Islamic bank in Moscow was closed because it was unable to provide services in accordance with Islamic law. The first experience turned out to be deplorable, as it did not meet with support from the Russian government. To function effectively in a country where the majority of citizens do not practice Islam is problematic to say the least.

Defying the law or looking for loopholes

In the context of a severe economic crisis, with the ruble exchange rate as low as possible, many domestic financial institutions lack liquidity. The situation provoked the active appearance of talks about close cooperation with the Islamic economy, about the introduction of new elements into the established financialstructure of Russia. At the government level, negotiations are actively underway with the OIC states. To say more, the interest of the state in partnership with exotic countries began to appear in 2009.

It is from this period that round tables are systematically held between members of the governments of countries, where issues of concurrent legislation are discussed. There are projects in history, according to which Islamic financial institutions practicing the principle of interest-free rates are introduced into the country. The trick is that Islamic banks in Russia, whose addresses are not difficult to find, are not positioned as proper banks, but have a different legal status. To put it simply, elements of Islamic banking are being introduced into the actual Russian banking system.

Islamic windows

"Islamic Development Bank" got the opportunity to provide its financial services in the international market and in the markets of countries where there are quite a lot of Muslims, thanks to such a concept as "Islamic windows". The essence of the term is based on cooperation with a branch of a standard bank, which operates in accordance with Shariah. The assets of the Islamic and Convention departments exist separately. They are managed and regulated in different formats. In the West, the practice of opening "Islamic windows" is quite common. It is used to attract a new segment of customers. Islamic banking in Russia in this format, although it exists, is not well developed. Thisthe category of establishments exists almost on semi-legal grounds.

A leap from the past to the future, or what stops the Russian government

Despite the current lack of a legal framework for opening an Islamic bank in Russia, the first talks on this issue appeared not in 2006 in Moscow, but in 1990. on the territory of Tatarstan. It is one of the largest secular Muslim republics in Russia. It may be recalled that in the early 1990s Sberbank planned to create an "Islamic window". In 1992, on August 14, the media received an official statement that a "United Islamic Commercial Bank" would be created. Unfortunately, the project was never realized, and the mentioned institute was never opened. Despite the unsuccessful experience of cooperation with the East, as well as in connection with the underfunding of domestic financial institutions, the Islamic bank in Moscow is no longer seen as a project, but as a fully realizable prospect.

Modernization of the tax code of Russia

The first thing Russia needs for a successful partnership with the East is the active development and modernization of tax legislation. This is necessary, first of all, for the implementation of tax neutrality. The bottom line is that the financial transactions of conventional banks in Russia are not subject to value added tax. As for Islamic financial institutions, according to their legislation, they must pay VAT at the rate of 18% on value added. At the same time,active discussions on increasing VAT to 20%. This puts the two types of financial institutions in completely opposite competitive conditions, not only in the domestic market, but also in the international one. The policy of the regulator in relation to Islamic banks is subject to a significant revision. It is necessary not only to completely eliminate the barriers to their development. It is imperative to think about the fact that the latter do not abuse their advantages.

Benefits of introducing Islamic banking in Russia

At the moment, Russia has the opportunity to take full advantage of Islamic banking due to the fact that there are no competitors in this matter yet. China, due to economic and religious beliefs, is not yet considering the prospects for cooperation with the East. A loan from an Islamic bank and other specific financial services can stimulate the flow of funds to the state budget. Moreover, Russia gets the opportunity to finance from a new partner, which is important in the current situation.