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Islamic banking to be legalized in Russia
Russia’s central bank finds it possible to develop the system stage by stage, including creation of experimental conditions. The State Duma plans to introduce a bill on Islamic banking by the end of the week. The documents have already been sent out for approval, and their discussion is scheduled for the autumn session. This was announced by Head of the State Duma Financial Market Committee Anatoly Aksakov. The bill “On Partnership Financing Facility” and two satellite bills thereto state that Islamic banking services can be provided by non-credit financial organizations (NFOs) of a special type, which will be included in the register of the Central Bank, Kommersant reports. Partnership financing will be implemented through: • provision of cash loans to individuals and legal entities without getting interest • provision of financing to individuals and legal entities as trading intermediaries under purchase and sale agreements that include an installment (deferred) payment clause or financial lease (leasing) agreements • financing of production and trading activities through participation in the authorized capital of legal entities and (or) on a partnership basis • suretyship. The Central Bank supported the development of Islamic banking in Russia. According to the regulator, this will open great opportunities for the lending to the economy and the financial sector development, but “the project requires “careful discussion.” Source: Kommersant