Expansion of Islamic Banking Trials in Russia Extended Until 2028
Rewritten Article:
The Ministry of Finance's backing propels a bill, extending Russia's Islamic banking trial run until September 1, 2028, according to Interfax. This experiment, commenced in August 2023, operates in the territories of Dagestan, Chechnya, Bashkortostan, and Tatarstan.
Currently, the Islamic banking trial includes a limited set of operations like attracting funds, leasing, issuing bonds, and providing guarantees. The proposed bill aims to expand this list by adding mutual insurance, banking account management, and money transfers. Furthermore, the Central Bank's grounds for refusing a company's inclusion in the experiment participants' register are set to broaden.
Intriguingly, this trial run aligns with the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) standards. It also involves collaboration with Arab funds, with plans to finance promising Russian and CIS start-ups.
Businesses will have the unique opportunity to attract partner funds and issue sukuk—the Islamic equivalent of bonds. These investments will be powered by Shariah principles, allowing investors a stake in future profits. A new platform for Islamic finance, currently in the registration process, will facilitate these transactions and investments, with a full launch slated for May 2025.
Moreover, AAOIFI is set to host its first international conference in Russia during KazanForum 2025, focusing on promoting sustainable development and global partnerships through Islamic finance and investment.
Local regions like Dagestan are eyeing foreign Islamic banks such as Oman's Bank Nizwa. The establishment of banking branches and the Partnership Finance Fund—licensed to operate in partnership financing by the Central Bank of Russia—are key to fostering Islamic banking in these regions.
Legislative adaptations to align Islamic banking standards with Russian practices are underway, overseen by the Ministry of Finance and the Central Bank. Meanwhile, the new AAOIFI Sharia Standard 62, though not directly connected to Russia's experiment, could potentially influence global sukuk markets, impacting any Russian issuers participating in international markets.
Moscow, Zoya Oskolkova
© 2025, RIA "Novy Day"
In the extension of Russia's Islamic banking trial run, businesses will be granted the chance to attract partner funds and issue sukuk, the Islamic equivalent of bonds, regulated by Shariah principles. This trial aligns with the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) standards, and correlates with plans to finance emerging Russian and CIS start-ups with Arab funds.
The Ministry of Finance, alongside the Central Bank, is working on legislative adaptations to align Islamic banking standards with Russian practices, allowing for the potential involvement of foreign Islamic banks such as Oman's Bank Nizwa in local regions like Dagestan. The proposed bill further seeks to expand the scope of operations in Islamic banking, incorporating mutual insurance, banking account management, and money transfers.
