Aim. This study aims to provide a general understanding of the Islamic finance model and the prospects of its implementation in the Russian context.
Tasks. This study analyzes Islamic methods of finance by identifying similarities and contradictions with the conventional Western models.
Methods. This study examined the major principles of the functioning of the Islamic finance system and identified and analyzed key mechanisms of banking capital formation. The author provides insight into the major finance models designed to evade interest rate. Both international and Russian experiences in the implementation of the Islamic finance system are examined and major problems are identified.
Results. Islamic finance represents a rapidly growing industry recognized internationally as a promising alternative to the conventional financial system because it exhibited greater resilience during the financial crisis compared to the Western banks. The issue of Islamic banking implementation in Russia has become of crucial importance in light of the sanctions imposed by the United States and the European Union combined with the need for an alternative financial model. Comparative analysis of major tools used within the Islamic and conventional financial systems indicates that despite their differences, it is possible to implement the same range of operations in Islamic banks as in conventional banks, making allowance for the observance of the basic principles of Sharia.
The steps that are being taken towards the implementation of an alternative financial system in Russia may suggest rapid development of this industry in the near future. However, its efficient functioning would require not only legislative changes, which are viewed as the main challenge by researchers, but also a number of other reforms relating to financial education and training of specialists capable of working in the Islamic finance system. The author believes that coordinated efforts in both directions are required to optimize the likelihood of success.
Keywords
Islamic finance, alternative financial system, Islamic banking, conventional finance system.
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