State Duma hopes to launch Islamic banking mechanism on July 1

11 May 2023

The mechanism of Islamic banking could be launched in Russia's regions as soon as July 1, 2023, if the relevant bill is passed. This was announced by Chairman of the State Duma Committee on Financial Market Anatoly Aksakov.


"We are counting and working closely on this, that during May - June everything will work out, the last version [of the bill] is already available now. Accordingly, the bill will be adopted in the second and third readings, so that, as it is already written in the draft law, on July 1 it will come into force," he said during the St. Petersburg International Legal Forum.


The bill on the experiment of introducing Islamic banking in Dagestan, Chechnya, Bashkortostan and Tatarstan was passed by the State Duma in the first reading in December 2022. The bill implies the introduction of an experimental regime for the implementation of partner financing in the Islamic republics.


The deputy also added that there is a proposal to increase the capital requirement for participants in the experimental regime from 10 million to 25 million rubles from January 1, 2024, but the State Duma considers an increase to 15 million rubles appropriate.


"The main risk that arises is how to separate non-financial transactions from financial transactions in the form of Islamic banking. Here we will have to do a lot of things manually. I absolutely agree with the approach of the Central Bank, there should be general requirements fixed in the law, and the details will be worked out in the bylaws, in the instructions of the Bank of Russia, the government, in order to allow the market to actively develop on the one hand, but in due time to cut off those who want to use the loophole to avoid value added tax, for example", added Aksakov.



GSV "Russia - Islamic world"

Photo: 23artashes/Creative Commons 4.0

Based on materials from TASS