ISLAMIC BANKING IN RUSSIA: INSTITUTIONALIZATION, PROBLEMS, PROSPECTS

Features of the Islamic banking development in contemporary Russia are considered in the paper. The relevance of the research is determined by the growing significance of Islamic financial institutions (IFI) in the global economy. The interaction of Islamic banking with the traditional Western model of financial and credit activities is a popular topic for international scientific discussions. The formation problem of financial banking in Russia has found only partial reflection in the scientific literature to date and requires further study. The authors have set the task of identifying the system key parameters of Islamic financial institutions in Russia, and the most essential factors and prospects for their growth. The research hypothesis is that Islamic banking has great development prospects in Russia. The research was carried out on the basis of the data revealed by the authors on the creation and operation of Islamic financial institutions in Russia using invent-analysis and expert assessments of the development of international Islamic banking. The novelty of the paper is determined by the comprehensively introduced information about Islamic banking in Russia including the regions of its greatest prevalence such as the Republic of Tatarstan, the Chechen Republic, and the Republic of Bashkortostan. The paper focuses on the state policy and regulatory activities of the Central Bank of Russia in relation to Islamic financial structures. The research outcomes confirm the hypothesis about favorable prospects for the development of Islamic banking in Russia and its integration into the system of the Eurasian financial market.


Introduction
Islamic banking occupies a significant position in the current global financial system. The main Islamic banking markets are in Egypt, Saudi Arabia, Malaysia, UAE, Qatar, Kuwait, Indonesia, Turkey, Pakistan, and Bahrain. Islamic banking is dynamically developing in the European Union system, and particularly in Great Britain where, along with Islamic banks, there are specialized Islamic windows in ordinary banks (Citibank, Barclays and etc.), through which halal operational activities can be carried out (Alharbi, 2016;Sobol, 2015). According to data of 2019, Islamic financial institutions including 428 commercial banks have been established in 105 countries. The total volume of Islamic financial assets has reached about 2 trillion dollars showing a steady upward trend (Puri-Mirza, 2021).
Islamic banking is an ancient financial phenomenon built on ethical and organizational principles which are sourced from the Quran (Abdul-Rahman, 2010). The main principle of Islamic banking is such an approach when the remuneration of the bank or a depositor is not initially guaranteed but occurs as derivatives of the invested business profit. Accordingly, the Islamic ethics of investment contributes to the development of the economy real sector and the enhancement of business culture. Thus, Geoffrey Grosh emphasizes that the emergence of Islamic banking in Central Asian countries contributed to their economic liberalization and access to global markets (Grosh, 2008). Despite certain difficulties in integrating European and Islamic banking models, it is obvious that this process is one of the most significant global trends in the 21 st century (Di et al., 2013). It is shown below that contemporary Russia is one of the emerging centers of attraction for the Islamic financial world.

Problem Statement
The integration process of the Russian banking system into the global financial and economic space of the 21 st century is currently taking place. Investment cooperation with the countries of the Arab world -Saudi Arabia, the United Arab Emirates, Oman, Kuwait, as well as Iran belonging to the Islamic civilization, is a considerable area of interbank interaction. An insufficiently explored issue of the formation of Islamic banking institutions in Russia is of significant scientific interest in the context of world and regional financial processes, and an aspect of global civilizational development.

Research Questions
The research subject is Islamic financial institutions in Russia, their typology, legal, and social activity conditions.

Purpose of the Study
The purpose of the study is to identify the features and prospects for the Islamic banking development in contemporary Russia. https://doi.org/10.15405/epsbs.2021.11.69 Corresponding Author: Ershov Vitaly Fedorovich Selection and peer-review under

Research Methods
The research is carried out on the basis of a systematic approach using invent-analysis, content analysis, and the method of expert assessments.

Findings
The Islamic windows in banks in Europe and the United States, as well as Islamic branches of traditional banks, for example, Citi Islamic Investment Bank in Bahrain, etc. (Zhuravlev, 2020). There are also differences in the doctrines and organization of banking in Islamic countries (Warde, 2000) which affects the process of establishing business relations between them in Russia and the countries of Eurasia.
The choice of sources and areas of capital investment, a ban on loan interest, and the distribution (rather than transfer) of risks and other regulations based on Sharia norms (Hussain et al., 2015;Warde, 2000), create potential competitive advantages of Islamic banking in the regions of Russia and post-Soviet states with predominant Muslim population (Bekkin, 2006;Grosh, 2008).
There are many models and approaches for including IFI in European banking systems in the world. Thus, the principle of "no obstacles, but no special favors" is typical for Great Britain in relation to Islamic financial institutions, and "wait and see" for Italy (Belouafi & Belabes, 2010). In both cases, leeway is given to market forces that determine the role and place of Islamic banking in specific markets under the current legislation. Further implementation of Islamic banking in Russia is associated with the development of additional legal instruments taking into account Russian specifics and world experience.
There are no fundamental obstacles to the widespread introduction of financial institutions of Islamic banking into activities in modern Russian legislation. Representatives of the Bank of Russia have several times declared their readiness to develop this area of financial business. Russian regulator is restructuring a number of business models so that Muslim customers could receive banking services in accordance with Sharia law. In 2017, the first Islamic finance roadmap was developed by an expert working group of the Central Bank of the Russian Federation. The register of insurance products for Muslims was offered by the branch of the "Allianz" insurance company. At the same time, the International Association of Islamic Finance (IAIF) opened a number of its branches in the Muslim regions of Russia.
In the summer of 2017, the first sukuk object was released for the deployment in Russia. The Central Bank of the Russian Federation registered a package of Islamic bond certificates "Sukuk Invest" in the amount of 1 million rubles, and allowed the use of a floating coupon rate in accordance with the profitability of investment projects in the halal industry (Riabchenko, 2018).
In 2017, PJSC Sberbank completed its first transaction using Ijara Mudarabah (investment in a leasing company in the Republic of Tatarstan). PJSC Sberbank, together with the government of Tatarstan, established the Russian Center for Islamic Economy, whose task was to activate fintech complying with Sharia law. In 2018, PJSC Sberbank launched a pilot project to accept deposits from the https: //doi.org/10.15405/epsbs.2021.11.69 Corresponding Author: Ershov Vitaly Fedorovich Selection and peer-review under  The implementation of Islamic financial products including halal investments, transport, and installments for movable and immovable property is successfully evolving in Tatarstan. These services are provided by the Financial House "Amal", "Ijara Leasing", and HC "Housing Traditions." The first halal unit investment fund "Lale" registered by the Central Bank of the Russian Federation began to operate under the leadership of the management company of "AK BARS CAPITAL" (AK BARS CAPITAL, 2020). Center for Partner Banking (CPB), Eurasian Leasing Company, and Non-Profit Fund "Barakat" also function in the Republic of Tatarstan.
Kazan Islamic Ak Bars Bank, within the framework of project financing operations, carried out a deal to raise funds on Sharia principles in the amount of 60 million dollars under the murabaha contract (for a period of 1 year). Such a widescale deal with halal funds was carried out for the first time in Russia and recognized as the "Best deal in Europe in 2011" (Petrova, 2012). The received investment funds were https: //doi.org/10.15405/epsbs.2021.11.69 Corresponding Author: Ershov Vitaly Fedorovich Selection and peer-review under  The development of the legal work of Islamic banking organizations is discussed by the expert https: //doi.org/10.15405/epsbs.2021.11.69 Corresponding Author: Ershov Vitaly Fedorovich Selection and peer-review under (Bulatova, 2015). A number of pilot projects of Islamic banking have been developed in Bashkiria. Rustam Muratov, the Minister of Economic Development and Investment Policy of Bashkortostan, says: "In the context of global cooperation, Bashkiria is interested in cooperation with the countries of the Islamic world. Therefore, today, in the context of the need for breakthrough economic growth, certain conditions appear for the entry of Islamic investments into the economies of Bashkiria and Ufa" (Gareev, 2019).

Conclusion
Therefore, Islamic banking as a technological and economic phenomenon has a number of significant advantages that make IFI's work promising in Russian financial market: Islamic financial institutions provide investment in the real economy sector, the Islamic banking model has a lower degree of riskiness in carrying out operational actions compared to the traditional one while ensuring the social orientation of financing, IFI demonstrate high resilience in a situation of global financial crises, and etc.