VEB to build bridge to Islamic world through Abu Dhabi, Iran and Bahrein

KazanSummit about Islamic finance

VEB to build bridge to Islamic world through Abu Dhabi, Iran and Bahrein Photo: prav.tatar.ru

A plenary session dedicated to the discussion of partnership financing used to develop relations between Russia and Organisations of Islamic Cooperation (OIC) while the international relations are not stable was the next event of 2017 KazanSummit. Realnoe Vremya's correspondent found out how Russian banks coped with difficulties while implementing Islamic banking and the importance of business for the richest Arab in the world.

Visiting Tatarstan investment projects

This day of the 9 th international economic summit started with Sberbank's breakfast where the development of partnership financing in Russia was discussed. Then all the delegation headed by Tatarstan President Rustam Minnikhanov and Vnesheconombank Chairman Sergey Gorkov accompanied by ''Tatarstan's wife'', director of the Tatarstan Investment Development Agency Taliya Minullina dressed in a smart bright dress looked over the exhibition dedicated to investment projects of the republic.

Bulgarian Islamic Academy, Kazan Federal University, HalalGuide that also started to work in Thailand, Nigeria and Canada – the delegation started the examination with these stands. Gradually switching from one presentation to another, they also heard about Khimgrad Technopolis, M7 industrial park, Naberezhnye Chelny Advanced Development Area where a representative told about the signing of an agreement with a Turkish company that is ready to invest money to produce aluminium goods and textiles in Tatarstan.

Then it was told about Innopolis and Alabuga economic zones, of course. Products created by Sberbank and Ak Bars Bank were presented. The latter is going to launch lease for SME according to Sharia in several months. A bit was told about 2019 WorldSkills that will take place in Kazan Expo exhibition centre that will be put into operation in the autumn 2017. The guests visited stands of heavy industry of the republic represented by Gorky Zelenodolsk Factory next to Ak Bars Holding and Tatarstan industrial giants Tatneft and TAIF. The latest model of General Electric gas turbine plant is installed in the latter.

All the delegation accompanied by director of the Tatarstan Investment Development Agency Taliya Minullina dressed in a smart bright dress looked over the exhibition dedicated to investment projects of the republic… Photo: prav.tatar.ru

Number of Muslims grows – opportunities increase

Islamic Finance World Leader and partner of PricewaterhouseCoopers Ashruff Jamal was the moderator of the plenary session. The president of the republic was first to give a welcome speech. He told that the work of meetings of Russia – Islamic World strategic group ended in the Republic of Chechnya yesterday.

''KazanSummit is an effective tool of the activity of this group allowing to achieve real economic results in the development of ties of Russia with the Islamic world,'' the Tatarstan president noted.

Rustam Minnikhanov presented data of international analytic centres: the number of Muslims is going to increase twice in the next 10 years than non-Muslim countries, which helps to expand halal areas of the economy. At the same time, international partnership economy centre is going to be created in Kazan now.

''In addition, we are not satisfied with the volume of economic cooperation of the Russian Federation with countries of the Islamic world now. Joint investment projects of these countries have not become mass yet, though the possibilities of this area are huge. Companies from Muslim countries have questions about the investment climate, guarantees, administrative, insurance and banking procedures in our country,'' Rustam Minnikhanov noted. He mentioned how important it was to create all the necessary conditions to develop the cooperation.

The address of the president of Russia was also read from the stage. It was told the Islamic world could completely count on the support of Russia and that Russia is ready to build cooperation to fight against forces of terror and in search of peaceful regulation of regional crises.

Ashruff Jamal was the moderator of the plenary session … Photo: prav.tatar.ru

''Business is a tool, not a goal''

The total volume of trade between OIC countries and Russia increased from $34 billion to $40 billion from 2010 to 2015 or, more precisely, by 17%. Director General of Islamic OIC Trade Development Centre El Hassan Zein told about it during his speech.

According to him, their organisation was ready to build partnership relations with the Republic of Tatarstan and all the Russian Federation to increase investment flows, promote financial and trade relations, create joint strategies, for instance, in agriculture. In addition, the work of their authorities is designed to adapt laws to harmonise relations between Russia and the Islamic world including liberalisation of these relations.

The Kanoo Group Chairman Mishal Kanoo who was announced as the richest Arab in the media also gave a speech at KazanSummit. He noted he was surprised by the choice of the scientists who were invited to the summit. In turn, he called Prophet Mohamed his main teacher who previously was an entrepreneur.

The businessman told that if we look at the geography of the Islamic world from the East to the West, we will see the Islam expanded better thanks to businesspeople and merchants. There was a certain reason for it. You can't have deals with your enemy, you can do it with your friend or a neutral side. And Islam reached those regions due to commercial links. It is linked with characteristics of those people who sold.

As he said, business for him is a tool, not a goal. In turn, he has been in Russia and Tatarstan for the first time. He liked it very much. Mishal Kanoo is sure that our people are ready to run a business. A business not for the sake of business but because they want to be part of the world they see. He himself uses business to improve the quality of his life and the life of his relatives and sees the republic is also aimed at it. At the end of his monologue, one of the richest people of the world urged all people to unite to develop and improve together.

As Mishal Kanoo said, business for him is a tool, not a goal. Photo: prav.tatar.ru

VEB went to Near East

Answering questions of journalists after the session, Rustam Minnikhanov noted that any novelty requires efforts. Now the republic is making its first steps in Islamic banking. According to him, it will give access to the new tool. In addition, due to sanctions, it is necessary to use all the opportunities to develop.

The president also commented an agreement that was signed between the republic and Turkish Gebze special economic zone.

''Any agreements give new opportunities. Gebze is one of the leading zones of Turkey. It is self-sufficient, has a powerful structure that solves all the problems of its residents. We have an idea thanks to which Sviyazhsk Multimodal Centre would be managed by Gebze economic zone,'' Minnikhanov told. According to him, at the moment, Turkish investors are actively working in the republic and want to create an attractive zone for them. Representatives of the two biggest banks in the country told the journalists about implementation paces of Islamic banking in Russia in detail.

The correspondent of Realnoe Vremya reminded the first speaker, Deputy Chairman of the Board of Directors of Sberbank of Russia PJSC Oleg Ganeyev that one year ago Deputy Chairman of the Federation Council Evgeny Bushmin claimed the Bank of Russia and legislation were not ready to spread Islamic banking. In answer to it, the banker replied now many questions are arising while implementing Islamic banking. But it is possible to work even within the acting Russian legislation.

''It is necessary to examine the demand maybe not for not all the range of products and services but to dive deep. Is there any sense in spending efforts? What result will be?'' the banker commented. Now there are problems linked with mortgage, car loans because there is double taxation on these deals.

''This is why they don't have an economic sense. And we focus on corporations, make better examinations from a perspective of licensing and obtaining fatwah,'' Oleg Ganeyev noted.

Sberbank presented the deal where fatwah was obtained in Kazan on 19 May. We mean a deal of the bank with a Tatarstan leasing company that was made according to Islamic banking.

Sberbank presented the deal where fatwah was obtained in Kazan on 19 May. Photo: prav.tatar.ru

The choice of the republic is logical in this case. Ganeyev, first of all, calls Tatarstan, Bashkortostan, Northern Caucasus republics among the regions the bank is interested in in implementing partnership banking.

What is more, Sberbank together with the Central Bank, VEB signed a memorandum with Islamic Development Bank. According to it, there are consultations, analyses of the Islamic Development Bank are used for a faster implementation of services for clients.

''In addition, Sberbank has a subsidiary in Turkey and Kazakhstan. Now we are analysing how to use our subsidiaries by using the specifics of these markets where law obviously helps partnership financing,'' Oleg Ganeyev told.

Bnesheconombank went forward in Islamic banking implementation – VEB Chairman Sergey Gorkov announced the appearance of bank offices in Abu Dhabi, Iran and Bahrein.

''It will be a creation of the system that which we called a bridge between Russian and the Islamic world to finance projects, support exports, infrastructure. This is why we don't have only one deal – the most important thing for us to create tools: the infrastructure, relationship with local banks, establishment of relations with governments of these countries, creation of the mechanism of tools, opportunity to make different deals,'' Gorkov told.

According to him, VEB is to announce the first export deal in Russia with Bahrein that will be made according to Sharia laws until late May or early June.

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By Maria Gorozhaninova. Photo: Oleg Tikhonov