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Saturday, 20 June 2009

Developing Islamic Banking in the Muslim Republic of Russia

The Islamic Banking is being developed and promoted all over the World. Recently not only Muslim countries such as Kingdom of Saudi Arabia, State of Kuwait, State of Qatar and others, but also countries not directly connected with Islam: England, France, Japanese and others have shown interest to it.

The Islamic Banking is very young. In contrast to the traditional European model of financial management it has no long history and development experience. Russian bankers got the experience of collaborations with Arabian colleagues three years ago. A Russian bank “Globaks’ announced an economical transaction of the attraction of credit of Dubai Islamic Bank in 2006 year. In 2007 year the agreement about the starting of the collaborations of Slavinvestbank with the financial institutes of the Meddle East countries was achieved.

And in the March a very major event was took place - The First International Conference Islamic Banking; specifics and prospects. It helped to apprise of the approaches an principle this direction for Russia

Nevertheless there is no actual promotion of the Islamic Banking yet. Though Russia is multi confessional country: by opinion of specialists up to 25 million of Muslims live in Russia. By diagnostic of experts, the Islamic Banking should continue to develop in Russia, to offer this service to Russian Muslims in the country in the Republic where people confess to hereditary of way of Islam.

In the early of 1990 years there were business negotiations about founding of financial institutions, offering products according of Seriate in Mahachkala the capital of Dagestan Republic. Now demands for the Islamic products are under examination. Now one of Dagestan Bank “Express” extensively offer of the Islamic debit card as one of hall products.

According to Mr. Ali Aliev, who is the First Vice President of Association of Dagestan Banks – “as of day Republic of Dagestan is a part of the investment processes, taken place at the south of Russia. Now it is profitable to invest in the regions, not to the traditional markets, which are already crowded.

The Islamic Banking will be developing say the Arabian economists. Though, it is difficult to assess the possibility of the durability of the Islamic Banking for Economic Crisis.

A lot of the Islamic financiers say about the big challenge for the Islamic Banking in 2009 year. And the one of goals for the Islamic Banks is the increasing of their business, offered products, a success which will be depend on product range, type of clients, which a bank is aimed, and the conditional of the market in this time.

If the Islamic finance products offered by professionally and a client has a good investment products for the private individual clients and also for corporate and government facilities, very often the Islamic products are more better then the other type of bank operations of a tradition bank said Mr. Aliev.

Despite that in Russia, as in other countries, it has no legislation which it is promoted to the Islamic Banking, anyway there is a possibility of the developing of the Islamic Banking in Dagestan through the structured products – pointed the Dagestan banker.

According to his version, it is not necessary that a share has been issued by an Islamic company. Shares, which are on the Russian stock exchange market RTS, are not be the Islamic shares, but they have Islamic characteristics according claims of the Muslim investors as there are company, for example, they do not business of the developing and selling of alcohol products. In other words despite companies are not Muslim their shares can be approach as social and mental shares for Muslim people. It is a decision of the situation which can become of the beginning of the developing the new model of financing which is the worth financial model by bankers and investors from the World.

Source: Press Release from Association of Dagestan Bank

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