Russia is considering a pilot project to introduce the Islamic banking system in the republics of Dagestan, Chechnya, Tatarstan, and Russian Bashkiria as a first step. This is based on many relevant requests from activists in Bashkiria, Tatarstan, Chechnya, and other republics of the North Caucasus. These initiatives are gaining attention because some countries in the Middle East and Asia have shown their interest in investing in these Russian regions, but they have not made this investment for religious reasons. In the 1990s, there were the first attempts to justify and support the creation of Islamic banks in Russia. This process in former USSR countries is regarded as a natural attribute of religious awakening. The first and only bank which positioned itself as an institution following Islamic finance technologies, Badr Forte Bank, with a limited range of products, operated from 1996 to 2006. It was only in the 2010s when several Islamic finance projects were created in various Russian regions, some of which still exist, and their experience allows us to assess some results. Starting from 2014, when the western capital market was restricted for Russia, the Russian authorities along with some big banks and corporates, for the first time, set their sights on Islamic banking as an alternative. The developing relations, at a high political level, between Russia and the Gulf countries, opened new opportunities for economic cooperation, including the Islamic finance segment. Effective cooperation in investment with foreign companies and funds also depends on the development and maturity of the local Islamic finance market, including relevant business projects.
Since the Islamic finance sector is currently unregulated in Russia, there is no official register or a list of Islamic finance companies or Islamic finance projects and transactions. The list of Islamic finance companies and products presented is formed based on the availability of Shariah control, which is an international practice based on AAOIFI standards. It does not exclude from the list the projects and companies, the level of Shariah control of which is questioned by some industry experts, given the fact that such projects have a significant level of political or international support or general market acceptance. Russian authorities are set to legalise Islamic banking amid ongoing sanctions by the US and European countries. The country looking forward to attract investors from Muslim-majoritiy countries as well as cater to domestic customers by allowing Islamic banking.