Chechen Republic Head Ramzan Kadyrov has said he has agreed with the management of Mazkorp from the United Arab Emirates on establishing an Islamic bank in Grozny

MOSCOW, January 29. /TASS/. The Islamic banking system continues making its way to Russia, although not as quickly as its supporters would like, primarily Russian Muslims who number 21 million people, according to various estimates. The main problems relate to the need to change the Russian legislation. But the first steps in this direction are already being made. A draft of amendments to the Civil Code was submitted to the State Duma this week to help separate Islamic money flows from non-Islamic funds. The document prepared by Deputy Chairman of the State Duma Committee for the Financial Market Dmitry Savelyev stipulates opening special bank accounts to allow investing funds on these accounts into assets permitted by the Code of Muslim Laws - the Shariat. Today financial flows at banks are inevitably mixed, which creates complexities for opening "an Islamic window." Islamic banking stipulates that funds are invested only in the assets permitted by the Sharia law. This implies a ban on loan interest because interest is both regarded as usury and banned by the Quran. A speculation is strictly vetoed. The use of problems or someone’s difficulties in one’s financial interests is prohibited. In particular, earnings that can be made on the financial market as a result of certain difficulties experienced by the state are considered as unacceptable. There is also a complete veto on gambling games, including lotteries, and it is prohibited to carry out futures transactions. Also, Muslims are not allowed to carry out operations that are at least somehow related to sin, for example, investing in the production of alcohol, tobacco, pig-raising or gambling business.

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The bill adapts the mechanism of escrow accounts to the requirements of Islamic business. Meanwhile, Chechen Republic Head Ramzan Kadyrov has said he has agreed with the management of Mazkorp from the United Arab Emirates on establishing an Islamic bank in Grozny. Professor of the Russian President’s Academy of the National Economy and Public Administration (RANEPA) Yuri Yudenkov has drawn attention to the fact that Ak Bars bank in Kazan is already de facto operating partially under this scheme. "This can only be welcomed because this means attracting resources much cheaper than the resources of Russian banks," he told TASS. "Steps in this direction should have been taken long ago." The problem of Islamic banking has been discussed in Russia since the early 2000s but this issue has become especially topical after western sanctions were imposed against Russia. The world market of Islamic finances is estimated at $2 trillion, according to experts. Islamic banking was discussed at the recent Gaidar economic forum in Moscow. As Adviser to the Prime Minister of Tatarstan and President of the Islamic Business and Finance Development Fund Linar Yakupov has said, the notion of Islamic finances causes a multitude of religious and political associations for ordinary persons in Russia.

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