Exchange resource: the number of regions participating in the Islamic banking project will increase

The expansion of the number of regions participating in the experiment on Islamic banking may occur in 2026-2027, said Anatoly Aksakov, head of the State Duma Committee on Financial Market. This will happen after the development and adoption of the relevant standards. What are the advantages of this type of financing and when the project can become federal — in the material of Izvestia.

Nuances of financing

Since September 1, 2023, an experiment has been launched on the use of partner financing instruments in the territories of four subjects of the Russian Federation: the Republic of Bashkortostan, the Republic of Dagestan, the Republic of Tatarstan and the Chechen Republic, the press service of the Central Bank reminded Izvestia. Along with the development of traditional financial services, these instruments can become an additional way to finance economic development. In addition, they can create conditions for attracting foreign investment, as well as for expanding the geography of foreign trade.

Photo: IZVESTIA/Dmitry Korotaev

"In June 2025, the State Duma adopted in the first reading a bill that provides for an extension of the experiment period until September 1, 2028," the ministry said.

Partner financing is a fairly new direction that opens up good prospects for Russian business, the press service of the Ministry of Finance told Izvestia. With the launch of the partnership financing experiment, the population and businesses have gained access to financial services based on ethical principles. At the same time, the profile of clients is not limited to purely religious affiliation.

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This is a rather specific type of financing that is popular in Muslim countries, so in Russia the experiment is being conducted in regions where the Muslim population predominates, Natalia Bogomolova, director of financial institutions ratings at the NRA rating service, told Izvestia.

Photo: RIA Novosti/Nina Zotina

— Traditional banking products remain inaccessible to them because they want to comply with Islamic financial principles: avoiding interest—bearing transactions and speculation, financing is linked to specific assets or projects; it is forbidden to finance certain activities that contradict Islam, such as alcohol, gambling, pork production, etc.; clarity and transparency of terms in contracts, — the expert noted.

In another way, Islamic banking is called partner financing, which means that participants share both income and risks from the implementation of projects — profits and losses are distributed between the bank and the client, Natalia Bogomolova noted.

— In the near future, the project will not become a federal project and remains a regional experiment for now. For the full-fledged regulation of Islamic finance, it is necessary to refine the existing regulatory norms, since now they are still focused on the traditional interest rate system. There is double taxation and difficulties with VAT, which increases the "cost" for customers of individual products, she stressed.

Photo: RIA Novosti/Natalia Seliverstova

Also, according to her, it is impossible to attract interest-bearing deposits in the form of financing, and alternative mechanisms that meet the requirements are still poorly developed and not popular with the population; the development of products based on Sharia law increases the operating costs of organizations.

Main advantages

Islamic finance creates real support for entrepreneurship through participation, not loans, Sergey Katyrin, President of the Chamber of Commerce and Industry of the Russian Federation, told Izvestia.

— It is already obvious that the model is working, interest in it is growing, and scaling it up would be a logical step. We support the idea of expanding our geography after adopting common standards and regulatory decisions," he said. — The partnership financing mechanism will expand the access of small and medium-sized businesses to stable long-term capital without excessive debt burden.

Photo: Global Look Press/Serg Glovny

Partner financing not only meets religious standards, but also has additional advantages: transparent conditions, the absence of hidden fees and unexpected payments, said Alexey Voylukov, MBA professor of business Practice in digital finance at RANEPA, in an interview with Izvestia. All operations are based on the principles of fairness and mutual benefit of the participants, and financing is aimed at the production of real goods and services, which supports the real sector of the economy. In addition, such a tool can facilitate the establishment of partnerships with the Islamic countries of the East, taking into account the current sanctions restrictions.

— The question of whether the project can become federal is still open. According to the results of the first stage of the experiment, it is already possible to record the results: 32 organizations are included in the register of the Central Bank, seven of which are credit organizations, the rest also participate in partner financing. At the end of last year, the volume of funds raised amounted to about 4 billion rubles, the most active region was Tatarstan, which accounted for more than two thirds of operations, the expert said.

Islamic banking provides greater inclusivity, especially for small and medium-sized businesses, an expert from the Popular Front said in an interview with Izvestia. Galaktion Kucava Analytics. The ethical framework of Islamic finance, which prohibits investments in "haram" sectors (alcohol, tobacco, gambling), attracts not only the Muslim population, but also a growing number of supporters of ESG principles.

Photo: IZVESTIA/Eduard Kornienko

— The issue of moving the project to the federal level is difficult, but if the key conditions are met, it is possible. The main obstacle is the lack of uniform standards. The development and approval by the Bank of Russia of clear rules for all Islamic financial products (murabaha, sukuk, ijara, etc.) are an absolutely necessary foundation for scaling, the expert is convinced.

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At the same time, in her opinion, a deep adaptation of legislation, especially tax and securities regulation, is required to ensure legal certainty for transactions, for example, with sukuk (Islamic bonds). A significant barrier remains the lack of qualified personnel who combine knowledge of the specifics of Islamic finance and the Russian legal system, which requires the launch of specialized educational programs.

— There are also risks on the way to federalization. The key is the limited demand observed in the pilot regions, where a small number of banks and companies are still involved," she stressed.

This is due both to the poor awareness of the population and businesses about the possibilities of Islamic banking, and to the often higher cost of its services compared to traditional loans (due to the complex structure of transactions and compensation to banks for lack of interest), the expert explained. Competition with the established traditional banking system will also be serious.

Photo: IZVESTIA/Eduard Kornienko

— This type of banking assumes the absence of interest payments and cannot provide speculative activity. I believe that in Russia it would be possible to use interest—free lending (or with a percentage equal to inflation) to finance strategically important and socially significant tasks," Rafael Abdulov, associate professor of Economics at NUST MISIS, told Izvestia.