The first Russian bank participated in the testing process of Islamic banking

The first bank was reported to have participated in the Islamic banking testing process that began in Russia.

The written statement of the Central Bank of Russia states that AK BARS bank officially participated as the first bank to participate in the testing process of Islamic banking, also known as participation banking.

The law, which allows the use of Islamic banking for trial purposes in four regions of the country, came into effect on September 1.

With the law on Islamic banking, the “legal trial period” of Islamic banking in the Russian regions of Tatarstan, Dagestan, Chechnya and Bashkortostan began.

According to the law, the trial period will last until September 1, 2025 and the Bank of Russia will have the authority to expand the list of regions where the process is implemented.

Institutions that will participate in the testing process will not have the right to determine interest rates, produce tobacco and alcohol products, market products such as weapons and ammunition, and finance gambling-related activities by conducting participation banking transactions.

While the ratio of Muslims to Russia’s total population is expected to rise to 30 percent within 10 years, Islamic banking is also gaining popularity.

Sberbank Senior Vice President Oleg Ganeev said in his statement that the Islamic ecosystem market is expected to reach a value of $7.7 trillion globally. (AA)