Russia is moving toward implementing Islamic banking practises in four of its primarily Muslim eastern regions—Chechnya, Dagestan, Bashkortostan, and Tatarstan.
In the Russian State Duma, a new bill intended to promote Islamic finance in Russia has already been accepted. This area will develop partnership financing organisations. The Bank of Russia, which will control the market and maintain a registry of companies.
Middle East Monitor (MEMO), a Qatari non-profit media outlet, explained in a July article that this shift toward Islamic banking, which has been in the works for a while, is a reaction to western sanctions because of the conflict in Ukraine. Therefore, in search of more lucrative trade in the Muslim world, Russia is turning to the Middle East.
There are Islamic banks all over the world. According to The Economist’s 2014 report, financial institutions that adhere to Sharia law hold about 1% of the world’s assets. The majority of Sharia-compliant banks exist in th Muslim-majority nations, but they are steadily expanding.
In 2004, the first Islamic bank in a non-Muslim nation opened in London, and in 2013, J.P. Morgan started providing customers with Islamic banking options. Islamic banking is now an option for people everywhere.
The Russian media outlet Interfax quoted Anatoly Aksakov, head of the State Duma committee on the financial market, as saying that, “the topic of attracting funds from Asian countries is on the agenda, from Arab countries, from Malaysia [and] Indonesia.”
Even outside of the current context of war, Russia’s tentative foray into Islamic banking and trade practise is not entirely unexpected. According to a 2017 US State Department survey, Muslims make up about 10% of Russia’s overall population. For hundreds of years, Russia ruled parts of the northern Caucasus. Due to the sizeable Muslim populations in these regions—Chechnya, Dagestan, Bashkortostan, and Tatarstan—Russia now has the largest Muslim population in Europe.