Islamic finance may debut this year in the Tatarstan republic in the form of sukuk, or bonds that, in accordance with Islamic law, do not charge interest, experts said at a World Islamic Economic Forum round-table discussion Wednesday.
“Russia is ready for sukuk,” director of the Gazprombank structured and syndicated finance department Alexander Kazakov said. “They can make Russia a lot of money. A trillion dollars.”
Gazprombank has been researching and developing Islamic finance tools for several years, Kazakov said. Structures for deals using sukuk are in place, but at this point more needs to be done to popularize the instrument.
Many challenges need to be overcome, however, before that happens.
Russia’s legal system needs to be amended for some of the instruments to be legal, and that might take a long time, Al Shams Capital founder Adalet Djabiev said.
Another issue is misconceptions about Islamic finance and the halal industry. Halal is anything that is allowed under Muslim law.
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