Russia is set to introduce Islamic banking for the first time through a two-year pilot program beginning on September 1, Al Jazeera reported.
Despite the existence of Islamic financial institutions in Russia, this marks the first instance where the country’s legislation officially supports such a launch.
The move comes after Russian President Vladimir Putin signed a law on August 4 to test the viability of Islamic banking.
As per reports, the pilot program will be conducted in four regions with significant Muslim populations: Tatarstan, Bashkortostan, Chechnya, and Dagestan.
These areas already possess considerable experience in the realm of Islamic finance.
“The success of this program could lead to the expansion of these regulations to the rest of the country,” reports added.
Islamic banking adheres to the principles of Shariah, the Islamic legal system. Under Shariah, transactions involving usury or interest are prohibited as they are viewed as unfair exchanges.