Russia is preparing to expand its Islamic banking initiative as demand for Sharia-compliant financial services continues to grow across the country. According to Russia’s largest lender, Sberbank, interest in Islamic finance products has increased significantly since the launch of the pilot program in 2023.
Islamic banking, also known as partner financing, follows Sharia principles that prohibit interest-based lending and speculative financial activities. Instead, the system uses ethical and asset-backed financing methods such as leasing, installment payments, profit-sharing agreements, and investment partnerships. It also avoids funding industries linked to gambling, alcohol, tobacco, and weapons manufacturing.
Russia initially introduced the pilot Islamic banking program in four Muslim-majority regions, including Republic of Tatarstan. Due to growing participation and public interest, authorities later decided to extend the program until 2028. Russia is home to nearly 20 million Muslims, with more than two million residing in Tatarstan alone.
Speaking at the KazanForum conference, Sber senior vice president Oleg Ganeev said the strongest demand has come from everyday banking services such as accounts, payment systems, cards, and deposits. He also revealed that Sber has introduced digital sukuk products, which are Islamic financial certificates designed to comply with Sharia law.
Russian officials say the Islamic finance sector still requires clearer regulations and unified standards. Anatoly Aksakov, chairman of the State Duma Committee on the Financial Market, stated that Russia could approve its first official Islamic banking standards within the next month.
According to Aksakov, lawmakers and financial institutions have already identified eight key areas for development based on standards developed by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI).
Meanwhile, Midhat Shagiakhmetov said Tatarstan has spent nearly 15 years developing its Islamic finance sector and currently offers around 35 Sharia-compliant financial products. He added that more than half of all transactions under Russia’s pilot Islamic banking program are currently taking place in the region.
Russian authorities are also considering expanding the initiative to additional regions while increasing the use of Islamic financial instruments to attract foreign investment and strengthen economic cooperation with Muslim-majority countries.