The State Duma adopted a bill on Islamic banking in the first reading

The State Duma adopted in the first reading a bill that provides for an experiment involving the establishment of an experimental legal regime for partner (Islamic) financing on the territory of individual constituent entities of the Russian Federation. According to the bill, the launch of the experiment is planned on February 1, 2023 in four regions - the Republic of Tatarstan, the Republic of Dagestan, the Chechen Republic and the Republic of Bashkortostan.

It is assumed that participants in the new legal regime have the right to provide cash loans to legal entities and individuals without charging interest in the form of interest; finance individuals and legal entities by concluding purchase and sale agreements (including real estate) with an installment agreement. The participant of the experiment is not entitled to collect remuneration in the form of a loan interest, to finance activities related to the production or trade in tobacco, alcohol products, weapons and ammunition, as well as gambling.

The document was initiated by a group of deputies and senators headed by Anatoly Aksakov, Chairman of the State Duma Committee on the Financial Market. The Deputy Prime Minister of the Republic of Tatarstan - Minister of Economy of the Republic of Tatarstan Midkhat Shagiakhmetov also takes part in the work on the bill.

Tatarstan is actively involved in the development of Islamic banking. In the republic, work in the field of partner finance has been going on for 15 years. Experience has been accumulated, operating models of organizations' activities have been formed. On December 1, the first Russian office of Sberbank was opened in Kazan, operating according to partner financing standards.

The submission to the State Duma of a draft law on conducting an experiment to test partner financing practices is a big step for the development of partner finance in Russia. The adoption of the bill will unlock the potential of existing companies, attract new participants to the industry and open access to funding sources from the countries of the Middle East and Southeast Asia, including those included in the OIC.