ALMATY, June 27. /TASS/. The Russian Finance Ministry predicts a multiple growth of Islamic financing in the country every year and sees great interest in this segment of the financial market, Deputy Finance Minister Federation Ivan Chebeskov said at the annual meeting of the Eurasian Development Bank (EDB) in Almaty.
"We have already issued tens of billions of rubles in such instruments. But we see that in the near future the potential is very large - this is a trillion rubles in equivalent within Russia. We have a huge domestic market for Islamic finance, but we also see huge potential for cooperation with others countries," he said.
"I am very surprised to see a huge number of foreign participants, development banks. Therefore, I take the opportunity to invite colleagues into cooperation, into partnership, if there is interest in working with the Russian Federation in the area of Islamic financing. We have it at a very early stage. That is why the growth opportunities, in my opinion, are huge. We expect multiple growth every year in this area," he said.
Chebeskov also noted that interest in this market segment was even higher than expected.
"The most interesting thing is that when we conduct our experiment, we see that Islamic financing and interest in Islamic financing go far beyond religion. We see that citizens - even those of a different religion - need this responsibility, they need an understanding that they participate in financial, sustainable projects. So, we see much wider interest here than we expected. This was also a very positive discovery for us in the course of our work," he said.
The Deputy Finance Minister said that the ministry had decided to extend the experiment on Islamic financing in Russia.
"The pilot [project] is currently designed for two years, but we have already decided for ourselves that we will extend the pilot, and we are already considering the introduction of comprehensive regulation throughout the entire Russian Federation," he said.
A two-year experiment in introducing partnership financing started in September 2023. Currently, the experiment is spreading to the territories of Dagestan, Chechnya, Bashkiria and Tatarstan. In the future, the territory of the experiment may be expanded by the Russian government in agreement with the Bank of Russia.
Islamic banking means conducting banking activities in accordance with Islamic norms. Payment of interest and derivative interest transactions, transactions with conditions of uncertainty, as well as financing of certain sectors of the economy such as gambling, pork production, alcoholic beverages, tobacco, weapons, ammunition are banned. You cannot finance trade in all abovementioned areas. Common Islamic banking operations are installments, leasing, and equity financing.