Islamic banking could be coming to North Caucasus

The recently established International Islamic Business Association (IAIB) has announced plans to develop halal businesses (permissible under Islamic law) and open offices throughout the region. However, changes in Russian legislation are needed to attract investment from Muslim countries, IAIB members have said.

The IAIB was launched in the assembly hall of the Golden Ring hotel in Moscow on 16 February, with an official ceremony that started with a prayer and reading from the Koran, and ended with songs and dances performed by the popular Russian singer Renat Ibragimov.

The long-felt need to establish an Islamic business association stemmed from Muslim investors interested in funding businesses in Russia, Marat Kabayev, a former soccer player who co-founded the IAIB and serves as its head, explained to journalists before the opening ceremony. Crucial, however, to these investors is that any business opportunities excluded activities prohibited by Islam.

According to Kabayev, non-Muslims can use IAIB’s services too if “they adhere to the Islamic economic principles of not lending and borrowing money with interest, and not producing and selling haram products and services, which are prohibited by Sharia [Islamic] law.” He explained that such products and services include, for example, the sale of alcohol, non-halal meat, and running gambling and night clubs.

Kabayev said the IAIB launch had coincided with a visit from Islamic Development Bank representative Alabodi Khaled Mohammed from the United Arab Emirates, and that IAIB planned to pursue with the bank the idea of developing Islamic finance in Russia.

“Investors, including the Islamic Development Bank, want to invest in ‘clean’ businesses that do not charge interest,” Kabayev said. “At the same time, many Muslim entrepreneurs, including small and medium-sized ones, would love to use development funds without resorting to interest-bearing loans.”

The head of the association says that businessmen in the Caucasus fully support IAIB.—Agencies

Published in Pakistan Observer, March 24th,2017