Russia enters Islamic finance
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