The clergy of the Republic of Tatarstan will play a significant role in the implementation of the law on Islamic banking, as they will actively inform the parishioners about the products and services available to them. Midhat Shagiakhmetov, Deputy Prime Minister of Tatarstan and Minister of Economy, emphasized the importance of clergy involvement during the Bank of Russia Financial Congress.
Shagiakhmetov highlighted the clergy's crucial role in the successful implementation of the experiment. He mentioned that discussions with the mufti of Tatarstan were held, covering various aspects of the bill. The clergy members, with their understanding of Islamic principles and teachings, will directly educate the parishioners about the specific banking products and services offered within the framework of Islamic banking.
The adoption of the law on Islamic banking also calls for an improvement in financial literacy. Shagiakhmetov emphasized "the need for collaborative efforts with the Ministry of Finance and the Central Bank of Russia to develop relevant courses and programs."
Bylaws and oversight
The success of the Islamic banking experiment will depend on the adoption of appropriate bylaws and the establishment of a robust system for control and supervision. Shagiakhmetov stressed the importance of "a proportional approach, considering the concerns raised by companies operating in this market. The drafting of the bill involved close collaboration with industry representatives to address these concerns and strike a balance between regulatory oversight and industry growth."
To ensure accessibility of Islamic finance, certain taxation issues need to be resolved. "During the experimental period, these issues have been adequately addressed. However, a comprehensive analysis of the results will be conducted to determine the need for clearer parameters of taxation, which could potentially be incorporated into the Tax Code," Shagiakhmetov stated.
Overview of the bill
The bill proposing the introduction of Islamic banking in Dagestan, Chechnya, Bashkortostan and Tatarstan passed its first reading in the Duma in December 2022. The bill aims to establish an experimental regime for partner financing in Islamic republics. The lack of fundamental disagreement among lawmakers suggests that the law may be implemented as early as August, according to Anatoly Aksakov, the head of the Duma Committee on Financial Market.
Islamic banking adheres to Islamic principles and prohibits lending interests and financial speculations. Instead, Islamic banks offer alternative forms of financing, such as installment loans, leasing and share financing. The introduction of Islamic banking in Tatarstan and other regions aims to provide financial services in alignment with Islamic norms and cater to the needs of the Muslim community.
GSV "Russia - Islamic world"
Photo: Nattanan Kanchanaprat/Pixabay
Based on materials from TASS