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16.12.2015

Article

The first step to meet Islamic banking in Russia was taken by means of Islamic leasing

Peculiarities of economic development motivated experts to look for the new banking instruments. Lately the offer to create the Islamic banking in Russia has been articulated with ever increasing frequency. The Islamic banking is understood to be a way of prosecuting the banking operations being in line with the religious rules of Islam. One of the main rules is refusal to draw interests from credit granting, deposits. Moreover, corporations that manufacture alcohol and tobacco, witchcraft related activity, speculation, gambling games are prohibited in the Islamic world.

This brings up the question, what helps the income of the Islamic banking to grow? Financial institutions appropriate money for investment projects. The entrepreneur gains a certain profit investing this money. He/she shares one part of the profit with bank and the bank in its turn shares with the depositor. Due to this various specific forms are carried out in the Islamic world, such as: musharaka and mudaraba (joint and trust management), murabaha (installment sale), sukuk (Islamic interest-free bonds), takaful (insurance) and others.

Thus far the isolated cases of implementing the Islamic bank took place in Russia. However in the end they all failed. According to experts, the main reasons for this are difficulties related to the Russian Legislation, lack of government support, as well as uncertainty of the Islamic banking development in the country where the majority of citizens doesn’t profess Islam.

Nevertheless, certain features of the Islamic banking in Russia might be turned into reality with the help of so-called “Islamic windows”. The point lies in the collaboration with the branch of the ordinary bank which carries out its activity in accordance with the Sharia. Thus, for instance, in 2011 the «AK Bars» Bank has successfully arranged the investment of funds of the syndicated financing*, employed within a framework of the Islamic transaction Murabaha in the amount of 60 mln USD. This transaction was recognized the best in 2011.

*Syndicated financing — is a finance product in which the credit is supplied to the borrower by no less than two lenders (lending syndicate), taking part in this transaction with a certain shares as a rule under integrated credit agreement. Structure flexibility allows using this type of financing practically for any project and borrower’s needs.

In 2012 the Islamic window was opened in the «Ellips bank» located in Nizhny Novgorod (according to Information and Analytical System Globas-i, the bank ceased operations by accession to AKB «Rossiisky kapital» in the end of 2014). Earlier the investment department of VTB «VTB Kapital» had been preparing the issue of the Islamic bonds sukuk. In 2014 it was decided to open the department of Islamic financing in «MBA-Moskva» bank. However in the whole the services of the Islamic bank in Russia never gained mass distribution.

In the current environment of the economic crisis, under the dropping ruble’s rate to the US dollar, many domestic institutions feel the lack of liquidity. This situation provoked the necessity of searching for and implementing the new lines of cooperation among which the Islamic economy is. At the moment the issue of implementation of the Islamic banking in Russia is at the stage of discussion. The adoption of enactment concerning the issue is being postponed.

At the same time the deputy corps gives consideration to the certain financing instruments subject to the Sharia, in particular the Islamic leasing. In November 2015 a bill determining the rules of settlement of the leasing transactions in accordance with the standards of the Islamic financing was introduced to the State Duma. Thus the provisions of the bill rule out conclusion of two transactions at the same time in regard to one property (rent or purchase/sale). In this respect it is suggested to carry out the change of ownership by means of both lease agreement and particular purchase/sale agreement. The latter conforms to the Sharia law.

The experts observe that the standards of the Islamic financing will work towards crossing the barriers in business relationships with the Muslim countries. The positive thing is that the Central Bank of Russia supported the performance of experiment on implementation of the Islamic banking in several regions.