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The Bank of Russia plans to launch a pilot Islamic banking project in Chechnya and Dagestan in 2023, the regulator’s press service told Interfax.
August 4 Central Bank published for public discussion the report “Financial market: new challenges in modern conditions”, in which, among other things, he announced the strengthening of the role of partner financing “as another source of resources for economic development”.
The press service of the Central Bank told Interfax that it was Islamic banking. An experiment on its development will first be carried out only in Chechnya and Dagestan. If the experience is successful, it will be extended to other regions of Russia.
To conduct the experiment, it is necessary to determine the list of financial services and operations “requiring reflection in the proposed regulation”, the composition of the participants in the experiment and approaches to regulation, the Central Bank said.
Islam forbids usury, so Islamic banks do not issue money at interest, and attracting money from individuals, they do not pay income on deposits (except for the percentage of inflation). Also prohibited are transactions with options and futures, financing of certain areas, for example, gambling. Islamic banking involves making a profit from investment income.
In Russia, the possibility of introducing Islamic banking has been discussed for many years. Head of the Central Bank Elvira Nabiullina back in 2014 spokethat the Central Bank is studying the issue of regulating this area.
In mid-July, Kommersant announcedthat bills on Islamic banking will be submitted to the State Duma. To do this, according to the publication, will be non-credit financial institutions of a new type – partner financing organizations (OPF). Anatoly Aksakov, head of the State Duma committee on the financial market, said that the projects would be considered in the autumn session.