The Islamic finance market, or interest-free finance, each in Russia and globally is projected to develop quickly, in accordance with an official from Russia’s largest lender, Sberbank.
Sberbank’s Senior Vice President Oleg Ganeev mentioned the Islamic finance market is projected to succeed in a worth of $7.7 trillion by 2025, representing a steady progress price of 40%.
Ganeev, in an interview with Anadolu Agency (AA), highlighted the progress of Islamic finance in Russia and Sberbank’s involvement on this sector. He emphasised that Islamic finance in Russia operates underneath the ideas of “participation finance.”
“We adhere to the fundamental principles that underlie these financial instruments. The core principle is the equal participation and sharing of risks, revenues and potential losses in unfavorable situations. This essence of partnership defines our approach in this field,” Ganeev defined.
Ganeev emphasised that Islamic finance gives sturdy safety in opposition to the cyclical dangers prevalent within the conventional monetary system.
He additionally talked about {that a} draft legislation for a pilot undertaking to check participation financing in Russia was submitted to the Duma, the decrease home of Parliament, final yr.
Ganeev offered an analysis of the Russian market, stating, “Currently, we estimate the market at approximately 700 billion rubles ($7.7 billion).”
Furthermore, Ganeev anticipated vital progress out there measurement, projecting it to succeed in 55 billion rubles inside a yr after the invoice’s adoption.
He highlighted the immense potential by noting: “At present, our bank’s payment line handles transaction volumes of around 22 billion rubles, indicating a tremendous growth opportunity.”
Ganeev commented on the numerous strides that Sberbank has made in Islamic finance, acknowledging the immense potential and demand throughout the market.
He emphasised that the events concerned have numerous necessities, primarily specializing in moral issues and adherence to particular norms.
Ganeev burdened that these requirements primarily intention to ascertain belief, stating: “It is crucial to create an infrastructure that ensures all transaction participants feel comfortable, and Sberbank actively engages in the development of this infrastructure.”
He additional talked about the institution of a devoted unit for Islamic finance inside Sberbank, staffed with licensed professionals.
“We are actively developing the necessary infrastructure. Currently, we offer a range of 13 products that encompass payments, transfers, letters of credit, trade finance and savings,” Ganeev elaborated.
Additionally, Ganeev disclosed that they’ve arrange a particular funding fund unit specializing in Russian firms which have undergone rigorous auditing processes.
“We’ve built trust management products, and we’re currently working on developing products to finance the needs of corporate businesses and our populations. That’s what we call infrastructure. Once all this is established, plus the bill is passed, it will be possible to think broadly that this direction and entry into this business has taken place.”
Noting that there’s a vital Muslim inhabitants in Russia, Ganeev mentioned: “Currently, the Muslim population in Russia is over 20 million, excluding immigrants, and we believe that over 7.5 million of them have a customer base that will work on these principles (Islamic finance).”
“The share of this non-immigrant population will increase to 30%, and 30% is a very large field of activity,” he mentioned.
Source: www.dailysabah.com
