Post by Miriam Mikeba Mirabeau on Dec 11, 2008 7:44:10 GMT 4
Express Bank, a regional Russian bank, which has been issuing Islamic debit cards in the Russian republic of Dagestan since July, intends to launch the product across the whole country, by making it possible for customers to apply for the card online. The roll out is a response to the popularity of the card in Dagestan, a predominantly Muslim area. The terms of the card have been designed in collaboration with the Spiritual Council of Muslims in Dagestan. According to a spokesman from the bank, the product has also proved popular with many Christians and Jews in Dagestan.
To comply with Shari’ah and at the same time with the Russian banking legislation, the accrued interest will not be paid into the cardholder’s account, but instead will be donated to charitable causes, primarily child healthcare, purchase of hospital equipment and modern diagnostic and life support apparatus for maternity wards.
This will be the only card of its type on the market in Russia, though it will not be the first foray by a Russian bank into Shari’ah-compliant finance. Badr-Forte Bank, the only Islamic bank to have been established in Russia, offered a similar interest-free debit card after opening in 1991. However, Badr-Forte had its license revoked in 2006, with many Russians considering the decision controversial.
To comply with Shari’ah and at the same time with the Russian banking legislation, the accrued interest will not be paid into the cardholder’s account, but instead will be donated to charitable causes, primarily child healthcare, purchase of hospital equipment and modern diagnostic and life support apparatus for maternity wards.
This will be the only card of its type on the market in Russia, though it will not be the first foray by a Russian bank into Shari’ah-compliant finance. Badr-Forte Bank, the only Islamic bank to have been established in Russia, offered a similar interest-free debit card after opening in 1991. However, Badr-Forte had its license revoked in 2006, with many Russians considering the decision controversial.