Russian huge empire is left behind its neighboring younger brother Kazakhstan in the fast growing development of Islamic Finance industry.

Russia in particular its Republic of Tatarstan is trying hard to attract the world’s attention as well as the Arab capital to its region.

This year Tatarstan hosted III International Islamic Business & Finance Summit KAZANSUMMIT2011, it is a major annual event that brings together leading public & private sectors, financial institutions, industry leaders, local businesses and national business associations. It also works as a link between Muslim World and Russia.

We should admit that Russia has a huge market, with its 20million Muslims, and very high demand of Halal products and Shariah compliant financial services. This attracts the attention of the world investors to look deeper at the region.

On one hand Russia has lots to offer: a high demand of the market for Halal products, wealthy local business partners looking for Islamic business opportunities, ample of natural resources and many more, however on the other hand we should acknowledge that incorporation of Islamic Finance into the Russian legislation will take time, and the government of Russia is not ready to speed the process yet.

Islamic Banking law is something that Russian Federation is still putting on hold, whereas it Republic of Tatarstan is half way frozen without the implementation of Islamic Banking law, lots of work have been done, on the educational and marketing part of the country however, without Islamic Banking law hands of Tatarstan Republic are tight.

Looking at the progressive neighboring Kazakhstan which  have implemented the Islamic Banking law and already has it first Islamic Bank and is working towards issuing it first Sukuk, slowly turning into the Islamic Financial Hub of Central Asia, Russia is losing it position at the New Global Alternative economy market in the region.

Russia plans to issue it first Sukuk, after all based on the local legislation they have no legal rights to issue anything alike, therefore they are looking towards the support of Malaysian Government for issuing a Sukuk on Malaysian Market.

Will a country be able to succeed in the arena of Islamic finance without the Islamic Banking law framework only future will show; however it would be a challenging battle…..

Yarlaeva A.