Rus­sia en­ters Is­lamic fi­nance

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Rus­sia has stepped into Is­lamic fi­nance, a sec­tor hold­ing as­sets of a tril­lion dol­lars. The ma­jor­ity Mus­lim Rus­sian Repub­lic of Tatarstan in the Volga re­gion has is­sued Sukuk Is­lamic bonds, as the re­gion has em­barked on an am­bi­tious drive to at­tract for­eign in­vest­ment.

De­spite the long time span re­quired for in­cor­po­rat­ing Is­lamic fi­nance in the Rus­sian con­sti­tu­tion, the Rus­sian of­fi­cials have ex­pressed the need of Is­lamic bonds to at­tract Arab cap­i­tal and in­vest­ment from Mus­lim coun­tries. Buy­ing Is­lamic bonds se­cures par­tial own­er­ship in a con­crete as­set like land or a build­ing and in­vestors are guar­an­teed a part of the prof­its gen­er­ated by the as­set.

Tatarstan has main­tained priv­i­leged re­la­tions with coun­tries in the Mid­dle East and South­east Asia. Among the in­vestors in­ter­ested in the mar­ket are the Jed­dah­based Is­lamic De­vel­op­ment Bank and var­i­ous banks in the Mid­dle East, Malaysia and Rus­sia. Ivanov, Vice Pres­i­dent Re­gional Banks As­so­ci­a­tion of Rus­sia, re­gards the emer­gence of Is­lamic fi­nance in Rus­sia as pos­i­tive for fi­nan­cial sec­tor de­vel­op­ment in the coun­try

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