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Sunday, 27 March 2016

First Islamic banking center opened in Russia's Kazan

AhlulBayt News Agency - Russia's first center of partnership (Islamic) banking was opened today in Kazan. It will operate in full compliance with the principles of partnership funding, which are widely used in many countries of Southeast Asia and the Middle East.

The opening of the center was attended by the President of the Republic of Tatarstan, Rustam Minnikhanov, the first Deputy Chairman of the Bank of Russia, Alexei Simanovsky and the Mufti of the Spiritual Directorate of the Muslims of Tatarstan, Kamil Samigullin.

"We live in difficult times, difficult economic circumstances force us to look for new ways," the head of the republic said.

The center was opened in the framework of a cooperation agreement between the Spiritual Directorate of the Muslims of Tatarstan and Tatagroprombank, TASS reports.

The working group, which is headed by the first deputy chairman of the Central Bank, Alexei Simanovsky, drafted a "road map" for the development of partnership banking and related financial services in the Russian Federation in 2016-2017.

The center will conduct investment, leasing and trading activities. It will share financial risks with its clients.

The head of the department of stock markets and financial engineering of the Faculty of Finance and the Banking Business of RANEPA, Konstantin Korischenko, said in an interview with a correspondent of Vestnik Kavkaza that Islamic banking is very actively developing form of financing.

"The only difficulty in the Russian context is that the banking does not quite fit in with the Russian Civil Code. Since the principle of payment for repayment of resources does not correspond to the basic principle of Islamic finance, which proposes a joint profit from economic activities. So active discussions are under way if changes in Russian legislation are possible. There are even proposals for a regulatory change, but unfortunately the problem has not been solved yet," the expert said.

The head of the department of stock markets and financial engineering of the Faculty of Finance and the Banking Business of RANEPA recalled that there is only one kind of legislation in Russia, which is the legislation of the Russian Federation, which, unfortunately, does not support such a type of financing now. "So the problem is how legal contracts between the parties will be signed." So currently research and consulting functions of the center will be more in demand," Konstantin Korischenko concluded.

The president of the Association of Russian Banks, Garegin Tosunyan, expressed opinion that "every banking service is in demand here," so "we should welcome this practice." "This type of banking, in terms of the specifics of provided services, may be attractive for a particular group of customers," he said.

The expert also noted that such banks will not be radically different from the usual, but they will be characterized by "forms of specialization, in which preference is given to only investment programs and approaches, while putting a particular emphasis on the cultural and ethical aspects of business.

(ABNA / 27 March 2016)
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