Banking authorities have disclosed the registration of Islamic State of Iran (ISI) in compliance with Islamic law, Sharia.
In a significant move, Russian President Vladimir Putin has extended the experiment on Islamic banking, also known as partnership financing, until September 1, 2028. The decision, announced on July 31, 2023, will see the continuation of the trial in the regions of Tatarstan, Bashkortostan, Dagestan, and Chechnya.
The initial experiment, which began two years ago, has been successful enough to warrant an additional five years. This extension was officially signed into law by President Putin.
Bank AKBF, a key player in this experiment, has registered an Islamic Investment Account (IIA) in accordance with Shariah norms. Within the IIA, shares of companies that have successfully passed a Shariah audit are offered.
The IIA, however, does not explicitly name the first president of the Spiritual Administration of Muslims of Tatarstan who certified the IIA of the Bank AKBF. The current leader mentioned is Kamil Samigullin.
Trust in the Russian capital market is a pressing issue, according to Vladimir Chistyukhin, the first deputy chairman of the Central Bank. Chistyukhin believes that the equity capital market is more suitable for partnership finance than debt financing.
The certificate issued to the IIA guarantees that investments will not be made in prohibited sectors, including alcohol, tobacco, weapons, and gambling. This assurance aims to maintain the integrity and ethical standards of Islamic banking.
The extension of the Islamic banking experiment was made official on the same day it was signed into law, marking a significant step forward in the development of alternative financial systems in Russia.
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