Participants at the Fourth International Peacemaking Forum “Islam – religion of peace and creation“, which was held in Grozny, discussed the establishment of Islamic banking in Chechnya. The resolution of the forum includes objectives on establishing Islamic banks and other financial institutions in the republic. The main point is establishing a working group under the head of Chechnya. According to the participants at the forum, it is necessary to prepare a legislative base and apply to the federal government of Russia on the implementation of pilot projects of Islamic banks and insurance companies in Chechnya. “Our republic is mainly agricultural. To promote this sector of the economy, serious investments are needed. We have big problems with the environment. The soil of our republic was poisoned during the wars, and serious sums of money are needed to recover it. We can obtain these through the financial instruments of Islamic banking. The parliament of Chechnya should prepare all the necessary documents on improving the banking legal base and urge the State Duma to adopt them,” a participant at the forum, the chairman of the Chechen Arbitration Court, Ikhvan Gerikhanov, said.
The vice-president of the federal Industrial Financing Union on implementation of presidential programmes of Russia, Ikhvan Gerikhanov, was able in the early 2000s to attract investments in the republic through special organizations of the UN and countries of the world. According to him, joint banking facilities could be established by Chechnya, Tatarstan and Bashkiria. Gerikhanov thinks these republics form the main Muslim population of the Russian Federation. Along with establishing the Islamic Bank he suggests opening insurance companies, enterprises, and other institutions based on financial instruments recognized by Islam.
The head of the ministry for the economic development of Chechnya, Abdulla Magomadov, thinks that Islamic banking is not simply about financing operations with banks of Islamic countries, as it might seem. It is banking activity, which correlates to the norms of Islam. Muslims are forbidden to take risks on purpose or play the market. These prohibitions are main differences from traditional banking. The basis of a traditional bank is the granting of loans. It is forbidden by the Koran as usury. Here comes the main difference of Islamic banking: a flat base rate. Investors of Islamic banks receive from their bank information on the project in which their money has been invested. So one can choose in which business to invest. There are several types of agreement relations between a bank and a client.
Magomadov believes that the factors which prevent the establishment and development of Islamic banking in Russia are lack of corresponding legislation, fear of Islam, absence or lack of knowledge in this sphere, the opposition of local authorities, financial ignorance of the population and mistrust of banks. Meanwhile, establishment of Islamic banks is supported by a traditional connection between Russia and the Muslim East, and the shattered world financial crisis, which reminds us about the necessity of diversification of risks through multi-faceted cooperation with various partners. That is probably why both Islamic banking and the Russian business sphere are hesitating.
In terms of the presence of credit organizations and providing banking services, Chechnya takes last place in the North Caucasus Federal District and one of last places in the Russian Federation.
Some participants at the forum stated that there is wariness toward the Islamic world in Russia. Experts say that the main reason for this lies in the political psychological sphere, as Russian businessmen are still afraid of terrorism, which is thought to come from the Arab world. Moreover, the Muslims of Russia are poorly consolidated and do not lobby for their interests. The participants at the Fourth International Peacemaking Forum consider it is high time to shift from words to action in Chechnya. Some people think that the reliable image of Ramzan Kadyrov can positively influence the situation and that establishing an Islamic bank in Chechnya could improve the trust of the Islamic world, which is ready to invest in projects of the republic.
Timur Utsoyev, Grozny, Exclusively to VK.
