Thursday 29 September 2022 \


A pilot project on Islamic banking to be launched in Chechnya and Dagestan

Moscow, August 4, 2022

The Bank of Russia plans to start piloting an Islamic banking project in Chechnya and Dagestan in 2023 and, together with the Ministry of Finance, is preparing appropriate amendments to the legislation, Interfax reports.

The Central Bank on Thursday published a document for public discussion on key areas for the development of the financial market in the face of sanctions. Among the regulator’s proposals is to strengthen the role of partnership financing, which will help raise additional funds to finance businesses, including SMEs. Russian legislation does not prohibit the provision of partner financing services, at the same time, in some cases, the provision of such services is difficult without special legislative regulation.

The regulator notes that in order to develop this area of ​​financial activity, it is planned to conduct an experiment in the territories of individual constituent entities of the Russian Federation, as a result of which a decision will be made to extend the legislative regulation of partner financing to other regions of Russia.

The press office of the Central Bank told Interfax that it concerns the development of Islamic banking.

“The Chechen Republic and the Republic of Dagestan were proposed by the Russian Ministry of Finance as subjects of this project and enshrined in the order of the President. The issue is being worked out by the Russian Ministry of Finance with the participation of the Bank of Russia, including the preparation of amendments to the legislation. Direct piloting on the territory of the subjects of the Russian Federation, the participants in the experiment, is expected in 2023,” the statement said.

To conduct the experiment, it is necessary to determine the list of financial services and operations that need to be reflected in the draft regulation, the subject composition of the participants in the experiment and determine approaches to regulation and supervision, the Central Bank notes.

In early July, Anatoly Aksakov, head of the State Duma Financial Market Committee, said that the draft law establishing the rules for Islamic banking had been sent to the departments for approval, and expressed hope for its adoption in the fall. “The topic of attracting funds from Asian countries is on the agenda, from Arab countries, from Malaysia, Indonesia - they, by the way, also show attention to this law, and I actively interacted with them,” he added.



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