Russian Banks Look to Build Islamic Finance Knowledge in Face of Sanctions
Russian banks are developing their expertise in Islamic finance to help broaden funding sources for local firms, though Western sanctions over the Ukraine crisis could hinder those efforts. Banks in the Middle East and southeast Asia, the major markets for sharia-compliant debt, are wary of becoming tangled in the EU sanctions. So some Russian lenders are trying to build their own in-house knowledge of Islamic finance. State development bank Vnesheconombank (VEB) is seeking help from Middle East firms to develop its Islamic finance expertise. VTB Bank is exploring sukuk deals for several of its clients. However, the lack of a Russian regulatory framework for Islamic finance is an obstacle.
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