MOSCOW – Russia unveiled Islamic banking system for the first time in the country’s history under a two year programme, starting from today (September 1, 2023).
Russia already houses several Islamic financial institutions but it is first time that such system was officially supported by the country through legislation.
Russian President Vladimir Putin signed a law for the Islamic banking system on August 4 to test the viability of the financial system.
The pilot programme has been launched in four regions with majority Muslim populations – Tatarstan, Bashkortostan, Chechnya, and Dagestan.
The system would be expanded to the other parts of the country after the success of this pilot programme, reports said.
The Islamic banking is based on the laws of Islam, under which transactions involving usury or interest are not allowed as they are viewed as unfair transactions. It also barred the use of deposit amount for betting and other activities prohibited in Islam.
