Islamic Banking: the Term, Factors of Formation and Prerequisites for Development in Russia

Abstract

The article systematizes the history of the formation of Islamic banking, formulates and proposes an interpretation of this concept, and also structures the main types of services which are provided by Islamic financial institutions. The result of analyse of the external environment is conclusion that the concentration of assets managed by Islamic banks in 2020 has exceeded $1.7 trillion. This concentration has token place due to the accumulation of significant liquidity by the countries of the Middle East and the necessity of diversifying national investment portfolios. It affords them meaningful role in the global financial system. At the same time, the conducted internal Russian socio-demographic analysis shows that more than ten million people who profess Islam in Russia do not have access to Islamic banking products. Based on this, the author of the work has identified fundamental factors, due to which there are no credit institutions in the Russian Federation in the considered market niche. The result of the work is the presentation of banking products and services that can be adapted to the principles of Islamic banking in Russia. General recommendations for their development are presented as well.