Malaysian-Russian consortium preparing a feasibility study on launching Islamic banking in Russian Federation has presented interim results of its work.

During last six months the Government of the Republic of Tatarstan and Malaysian-Russian consortium comprising UNIRAZAK, IBFIM and IBFD Fund has been working up on the possibility of preparing the Feasibility study on launching Islamic bank or Islamic banking window on the territory of the Republic of Tatarstan as a pilot region for the introduction of Islamic banking and finance in Russian Federation.

Consortium members believe that the Republic of Tatarstan may become a plot region for Islamic banking introduction in Russia and serve as a background for necessary amendments in current banking legislation.

The Feasibility study includes main principles and philosophies of Islamic finance, strategies and approaches of Islamic banking and takaful implementation, market study on the potential Islamic finance consumers, considerations and prerequisite of successful implementation.

Tatarstan, i.e. its capital city Kazan – has first accommodated expert discussions of the Feasibility study among bankers, academicians and regulators of the region. Discussions were held from 2 to 5 October in the regional office of Sberbank, Russian Islamic Institute and the Ministry of economy of the Republic of Tatarstan.

Expert discussions held on 7th of October in the Central Bank of Russia have given the final comments and amendments from the working groups within the Central bank and Federation Council, Associations of Russian banks and regional banks, key financial market players of Russia.

Dato Dzulkfle Bin Mahmud, CEO of Matrade, Linar Yakupov, the President of IBFD Fund, Professor Barjoyai Bardai, Director of the feasibility study project, Dato Ahmad Tajudin, senior director of Sri-Lanka bank, previously Managing director of Bank Islam Malaysia Berhad, Dato Wan Ismail Wan Yusoh, advisor to the managing director of Bank Islam Malaysia Berhad, Wan Zamri Wan Ismail, CEO of Asean Retakaful International Ltd., Wan Abdul Rahim Kamil, consultant to the Securities Commission of Malaysia, were among the main participants of discussions.

Linar Yakupov, one the representatives of the Malaysia-Russian consortium: “Today it’s clearly what we are going to get in the final feasibility study, that is why we ask you to get actively involved in the discussions and give your assessment to the work, so that the feasibility study would become a serious platform for the development of Islamic finance industry in Russia”.

Dato Dzulkfle has also given a very constructive comment and asked participants to keep in mind four key aspects of Islamic banking and finance: the first – Islamic banking is a system that promotes the economy growth and well-being of its citizens. Islamic banking system may exist side by side with traditional banking system. Besides, Islamic economy is more clear and predictable, based on principles of fair relations, trade promotion and social protection.

Malaysian consortium has presented a deep analyses of how Islamic finance may work in Russia, including detailed road map in financial instruments introduction.

Comments of the participants were very useful and substantial and covered issues related to taxation, regulation, experience and global practices, amendments to current legislation, awareness of the population, pilot project launching. Participants have concluded that the market is ready for changes and is interested in new effective financial instruments.

The final feasibility study is planned to be presented during IFN CIS & Russia Forum on 9th of December, 2015 in Moscow, organized by REDmoney Events in collaboration with IBFD Fund. The event has a full support of russian state authorities, as well as supported traditionally by global Islamic financial market players, including ICD as a multilateral strategic partner.