Russian Islamic finance restricted by sluggish market

Author: Lizzie Meager | Published: 15 Sep 2015

Russia is eyeing adjustments to financial legislation to allow Islamic finance as it battles against harsh economic sanctions. But the take-off has been sluggish, according to market participants, in part due to poor wider market conditions.

Coupled with a long recession, Western sanctions have put the Russian economy under pressure and seen the Kremlin looking east for investment.

While a draft law allowing for alternative finance was submitted to parliament’s lower house, Duma, back in March, the finance ministry reportedly rejected the bill in May. But Dmitry Dembich, a partner at Baker & McKenzie’s Moscow office, said that there has been little outspoken resistance to the idea. "It’s just not at the top of the government’s priorities right now," he...