“We have given a tremendous signal to the Islamic world, we cannot slow down”
The round table on Islamic finance, which was held at the Investment Development Agency of the Republic of Tatarstan on November 15, summed up the interim results of the experiment in 4 regions of Russia and showed their approaches to working in the new legal field.
19 speakers from organizations and regions, whose activities today determine the processes in Islamic banking, gathered at one table. The creator of Russia's first Islamic office "Sber", the first to register in the register of the Bank of Russia "Ak Bars Bank", the Iranian "World Business Bank" spoke about their products, current demand indicators and further development.
Thus, Sber has opened 3,000 accounts for individuals, there are cash settlements, salary projects, financing for developers, an exchange-traded fund and a halal index, and has tested muraba mortgages, sukkuk, and life insurance. A roadmap for opening offices in the pilot republics is now being formed. The bank places emphasis on staff training.
“Ak Bars Bank” said that the first transactions according to Islamic laws in the republic took place 10 years ago, and an expert from the Muslim Spiritual Board of the Republic of Tatarstan is constantly working in the bank. Now we are actively developing new products, including leasing, and a mobile application is being developed. The bank is developing an Islamic window system in its offices in different cities.
Any day now, Mir Business Bank, which actively works with Iranian investors, will confirm its presence in the register of Islamic finance. Other round table participants shared the actually working mechanisms of Islamic banking in the housing, brokerage and financial investment sectors. Among them is the Sahih Invest application developed in Innopolis.
Thus, there is enough supply on the Tatarstan market; now we need to actively create demand.
Minister of Economy of Tatarstan Midhat Shagiakhmetov said that a sociological survey on the topic of Islamic finance was recently conducted in the republic. The respondents were all banks operating in Tatarstan, about 400 enterprises that are in one way or another interested in partner banking, and about 3.5 thousand residents. The results of the study indicate that businesses, credit institutions and the population have an acute lack of information.
Increasing financial literacy in the field of partnership finance is the first issue that needs to be addressed today.
Also an important task for all participants in the experiment is the entry of banks and financial companies into the register of the Bank of Russia. Today there are three organizations in it, two of which are Tatarstan. Applications from two more organizations from the republic are currently under consideration by the Bank of Russia.
The ideologist of the law on partnership financing, deputy of the State Duma of the Russian Federation of the eighth convocation, Airat Farrakhov, said that against the backdrop of the highest key rate, partnership financing has additional advantages: “We have given an amazing signal to the Islamic world, we cannot slow down. We discussed with Rustam Nurgalievich that support measures should be taken at the federal level, taking into account the fact that the experiment has begun. I mean benefits, subsidies, compensation for lost income, and so on.”
At the same time, according to Farrakhov, Tatarstan can now consider introducing some kind of support measures. This would be an important first step and an example for other entities. He proposed creating a platform similar to invest.tatarstan, which reveals the investment potential of Tatarstan, but dedicated to partnership financing. According to the deputy, it is necessary to identify the best projects in the field of partnership financing, reward them with prizes and hold competitions. This measure will serve to speed up the spread of Islamic banking.
Another proposal of the deputy was the creation of a simple and accessible instruction for banks and financial organizations. The head of the AIR, Talia Minullina, responded by saying that work in this direction is already underway. The agency is developing such a product together with the Ministry of Economy and the National Bank.
By the way, the Bank is already collecting feedback on the experiment through questionnaires and requests. Feedback from representatives of the pilot regions was also heard during the round table. They asked questions about the need to create a self-regulatory organization in the industry, refinancing tools, liquidity, and personnel training.
From the point of view of the current situation in Islamic banking, what is happening in the Chechen Republic is interesting. The loan portfolio in the field of Islamic finance here amounts to 51.7 billion rubles, which is 8.6% more than the previous year, while 44.7 billion rubles. Of these, retail lending is accounted for, that is, the greatest demand for products is observed among individuals, the corporate sector is greatly “sagging.”
The figures are interesting: if all organizations providing services in Tatarstan have specialists in Islamic finance, then in Chechnya 2 out of 16 organizations work with a specialist, and in Dagestan 4 out of 10.
Verification issues continue to generate debate in the field of Islamic finance. Talia Minullina, head of the Tatarstan Agency for Investment Development, confirmed that this pressing issue of the need to create such a body, which would have the last word in verification issues, is now being actively discussed at the federal level:
“Of course he is needed. Otherwise, this is a gap for the machinations of potential unscrupulous market participants. It is impossible to leave blank spots in the legal field that scammers can exploit. Transparency of relationships is what attracts clients to partnership financing. Islamic banking should be focused on good causes.”
At the suggestion of Talia Minullina, all recommendations from the round table participants will be collected by the Agency into a single document in the form of a legislative initiative. “Today, together with other pilot regions, we “synchronized watches” and agreed on plans for further work, because for now everyone is “stewing in their own juice,” but we need to unite together and solve a whole range of issues, starting from mass informing the population about Islamic banking to high-quality training of specialists,” said the head of the Tatarstan Agency for Investment Development.