Post by Sapphire Capital on Sept 5, 2008 21:35:54 GMT 4
Sep 4, 2008
A new Islamic debit card is due to be launched across the country, with terms and conditions guaranteed to be halal by Muslim spiritual leaders.
The card, offered by Express Bank, has already been introduced in the predominantly Muslim region of Dagestan, but Express Bank told The Moscow News that the card has been so popular it is now working on a system to make it available across the whole country;
"Muslims are thinking more about the principles of their religion, particularly at this holy time of year, so the card is becoming more and more popular. Although it is currently only available in Dagestan we are working on a way for people to be able to apply for the card using the internet so it will soon be available to Muslims all across Russia," a spokeswoman for the bank told The Moscow News.
Conventional bank accounts are considered a taboo under Sharia Law, which prohibits Muslims from both receiving interest on deposits and paying interest on overdrafts and loans. But as there are currently no Islamic banks in Russia, Muslims in the country have been left with few alternatives.
The new Islamic debit card promises customers that any interest earned on their accounts will be donated to charitable causes, such as maternity wards for local hospitals. The terms of the card were decided by the bank in cooperation with the Spiritual Council of Muslims in Dagestan, which also helped with the card design to insure its appearance would conform to Islamic law, such as avoiding visual depictions of living beings.
"There are no other banks in Russia offering this kind of service so we had no format to follow, we had to do it all on our own, consulting Muslim leaders every step of the way. But the success of the card shows that there is a demand for this type of service and we are considering expanding into other types of Islamic financial services," said the spokeswoman.
There have been other attempts to develop an Islamic financial services industry in Russia, most notably with Badr-Forte Bank, the only Islamic bank to be established in Russia. Badr-Forte Bank opened in Moscow in 1991 and offered customers a similar interest-free debit card as well as halal money transfers and mortgages.
However the bank had its licence revoked by the Russian Central Bank in 2006, a decision that caused controversy at the time. The Association of Russian Banks complained that most of the reasons given by the Central Bank for the decision were "Not based on the legal norms and acts of the Central Bank", and that the Central Bank had refused to recognise the fact that Badr-Forte had developed a plan of action to address the legitimate reasons given.
"There were, and still are, some people working in the Russian Central Bank who do not support the idea of Islamic banking," Renat Bekkin, expert in Islamic finance and professor at the Moscow State Institute of International Relations, told The Moscow News
"Some people think that they support terrorism or other illegal activities. There can also be opposition from conventional banks who don't want the competition."
Bekkin welcomed the new debit card as a step in the right direction but added that other Islamic financial services such insurance and mortgages are more urgently required than a debit card particularly in the capital:
"Conventional cards often only offer a small amount of interest and people can donate this to charity so they don't really consider it to be a problem. But there are a number of financial products that you can't avoid if you live in a big city, for example you need insurance if you have a car. I think the majority of Muslims in Moscow just get conventional products without thinking about it, they often don't realize that they go against Islamic principles."
One of the biggest obstacles to the development of specialised Islamic financial services in Moscow is the lack of awareness and education among many Muslims about the prohibition on usury. Whereas in Dagestan the principles of Islamic banking are preached by Sufi sheiks to packed-out mosques, the religious leaders in Moscow have far less clout and smaller audiences.
Tugrul Comert, a Muslim expat from Turkey who has been working in Moscow for two years told The Moscow News he was surprised about the lack of services and awareness regarding Islamic banking:
"There are many Arabic banks in Turkey and people are interested in Islamic banking but I have never heard people talking about it in Russia. It makes being a practicing Muslim in Moscow very difficult."
The card has also received attention from some unexpected quarters since its release in Dagestan: "The card has been surprisingly popular with Christians and Jews in the region, apparently they really like the design," explained Express Bank's spokeswoman.
Source Rebeccah Billing
mnweekly.ru/business/20080904/55345097.html
A new Islamic debit card is due to be launched across the country, with terms and conditions guaranteed to be halal by Muslim spiritual leaders.
The card, offered by Express Bank, has already been introduced in the predominantly Muslim region of Dagestan, but Express Bank told The Moscow News that the card has been so popular it is now working on a system to make it available across the whole country;
"Muslims are thinking more about the principles of their religion, particularly at this holy time of year, so the card is becoming more and more popular. Although it is currently only available in Dagestan we are working on a way for people to be able to apply for the card using the internet so it will soon be available to Muslims all across Russia," a spokeswoman for the bank told The Moscow News.
Conventional bank accounts are considered a taboo under Sharia Law, which prohibits Muslims from both receiving interest on deposits and paying interest on overdrafts and loans. But as there are currently no Islamic banks in Russia, Muslims in the country have been left with few alternatives.
The new Islamic debit card promises customers that any interest earned on their accounts will be donated to charitable causes, such as maternity wards for local hospitals. The terms of the card were decided by the bank in cooperation with the Spiritual Council of Muslims in Dagestan, which also helped with the card design to insure its appearance would conform to Islamic law, such as avoiding visual depictions of living beings.
"There are no other banks in Russia offering this kind of service so we had no format to follow, we had to do it all on our own, consulting Muslim leaders every step of the way. But the success of the card shows that there is a demand for this type of service and we are considering expanding into other types of Islamic financial services," said the spokeswoman.
There have been other attempts to develop an Islamic financial services industry in Russia, most notably with Badr-Forte Bank, the only Islamic bank to be established in Russia. Badr-Forte Bank opened in Moscow in 1991 and offered customers a similar interest-free debit card as well as halal money transfers and mortgages.
However the bank had its licence revoked by the Russian Central Bank in 2006, a decision that caused controversy at the time. The Association of Russian Banks complained that most of the reasons given by the Central Bank for the decision were "Not based on the legal norms and acts of the Central Bank", and that the Central Bank had refused to recognise the fact that Badr-Forte had developed a plan of action to address the legitimate reasons given.
"There were, and still are, some people working in the Russian Central Bank who do not support the idea of Islamic banking," Renat Bekkin, expert in Islamic finance and professor at the Moscow State Institute of International Relations, told The Moscow News
"Some people think that they support terrorism or other illegal activities. There can also be opposition from conventional banks who don't want the competition."
Bekkin welcomed the new debit card as a step in the right direction but added that other Islamic financial services such insurance and mortgages are more urgently required than a debit card particularly in the capital:
"Conventional cards often only offer a small amount of interest and people can donate this to charity so they don't really consider it to be a problem. But there are a number of financial products that you can't avoid if you live in a big city, for example you need insurance if you have a car. I think the majority of Muslims in Moscow just get conventional products without thinking about it, they often don't realize that they go against Islamic principles."
One of the biggest obstacles to the development of specialised Islamic financial services in Moscow is the lack of awareness and education among many Muslims about the prohibition on usury. Whereas in Dagestan the principles of Islamic banking are preached by Sufi sheiks to packed-out mosques, the religious leaders in Moscow have far less clout and smaller audiences.
Tugrul Comert, a Muslim expat from Turkey who has been working in Moscow for two years told The Moscow News he was surprised about the lack of services and awareness regarding Islamic banking:
"There are many Arabic banks in Turkey and people are interested in Islamic banking but I have never heard people talking about it in Russia. It makes being a practicing Muslim in Moscow very difficult."
The card has also received attention from some unexpected quarters since its release in Dagestan: "The card has been surprisingly popular with Christians and Jews in the region, apparently they really like the design," explained Express Bank's spokeswoman.
Source Rebeccah Billing
mnweekly.ru/business/20080904/55345097.html