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Russia's Sberbank to propose Islamic finance regulatory changes, set up new unit

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Russia's Sberbank to propose Islamic finance regulatory changes, set up new unit

PAO Sberbank of Russia will propose regulatory changes to make sharia-compliant business easier as it looks to establish an Islamic finance unit, Reuters reported Oct. 11, citing "a senior bank official."

Sberbank has looked into Islamic finance options within the current regulatory environment in Russia, but aims to propose possible reforms to authorities by the end of 2017, Oleg Ganeev, deputy chairman of the executive board, told Reuters in an email.

He said the bank will decide on whether or not to establish a separate entity by 2018.

New legislation in the country could make Islamic finance cost-effective and help Russian banks bring in investment from the Gulf and the Southeast Asian regions, Reuters said. Under current regulations, Islamic finance transactions, which are based on multiple transfers of underlying assets, incur additional taxes.