Media: Russia may legalize Islamic banking without interest

13 July

 

Russia in the near future may legalize Islamic banking, assuming no interest income, writes "Kommersant", citing the head of the State Duma Committee on Financial Market Anatoly Aksakov.


"The documents have been sent out for approval, their consideration is scheduled to begin in the fall session," the publication said.


According to the draft law "On the activities of partnership finance" and the two bills that accompany it, the services of Islamic banking will be provided by non-credit financial institutions (NFI) of a special type, their activities will be regulated by the Central Bank.


The text of the document indicates that NFI will be able to provide money loans to individuals and legal entities without receiving compensation; finance them as a commercial intermediary through the contract of sale with the condition of installment (deferred payment) or leasing contracts; to finance industrial and commercial activities and provide guarantees.


The authors of the bill pointed out that with the severing of ties with the Western financial markets, the need for partnership (Islamic) financing tools is increasing.


"The activities of NFIs are based on raising funds from customers under the partnership investment agreements and placing them through the purchase of goods and their subsequent sale with a commodity mark-up on the terms of installment or deferred payment or leasing contracts," the article noted.

 

The Central Bank said that they generally support the development of legal conditions for the functioning of partnership finance, as it will have a positive impact on the financial sector.

 

 

GSV "Russia - Islamic world"

Photo: Creative Commons

Based on materials from RIA Novosti