News / Business

Russia to use Islamic banking to ease effects of sanctions

Saturday, 30 May 2015 6:08 PM [ Last Update: Saturday, 30 May 2015 6:09 PM ]

Russia's Sberbank says it plans to use Islamic baking to ease effects of sanctions.

Russia’s largest bank Sberbank announced on May 30 that it is considering plans to introduce Islamic banking in the country’s traditionally Muslim regions.

Sberbank’s head, Herman Gref, told a shareholders meeting on Friday that the idea would help attract capital from Arab countries thus reducing the effects of sanctions against Russia.

Russia has been targeted by a series of sanctions by EU and the US over allegations of interference in Ukraine’s crisis. Moscow rejects the allegations and in response to sanctions has enforced restrictions on some food imports from the US, the EU, Norway, Canada and Australia.

"We will actively promote the development of such a tool as Islamic banking, as it opens up a good opportunity to work with international partners amid sanctions," said Gref.

"In circumstances where we have problems with raising funds on the international markets, it is a very important thing," he said, adding that he had recently held a series of meetings in the Republic of Tatarstan with Arab investors.

Analysts believe that the rapid growth of the Muslim population in Russia contributes to a sharp increase in demand for Islamic banking tools expected in the coming years. They say the Russian government has to elaborate a legal framework that will integrate Islamic banking into Russia's financial system.

If this is done, the volume of Islamic financial assets not only in Russia, but also the countries of Central Asia, could reach $24 billion as early as 2018, reported Russia Today in an article on its website.

AA/AA

Press TV’s website can also be accessed at the following alternate addresses:

www.presstv.co.uk

Russia