Russia's VEB looks to Persian Gulf states for expansion of business

MOSCOW, December 17. /TASS/. Russia’s state-owned development bank Vnesheconombank (VEB) said on Wednesday it would examine Islamic finance rules in Arab states in the Persian Gulf region over the course of the year to be ready to enter the burgeoning market. “We have great interest [in Islamic finance], and no matter what our relations with European and American partners will look like, we want to develop links with the Islamic world,” VEB chairman Vladimir Dmitriev said. The bank, targeted by Western sanctions over events in Ukraine, has almost no access to foreign financing. “I believe that one year is quite a realistic term to assess the opportunities provided by the local financial market,” Dmitriev said. Sukuk - Islamic bonds based on religious guidelines such as bans on interest and monetary speculation - have gone mainstream over the years. Experts estimate that some $165 billion worth of sukuk will be issued around the world in 2015. Russia, which is increasingly shifting its focus to Asian markets after Western sanctions targeted a number of state-controlled lenders and energy companies this year and limited their access to funding, needs to change its banking regulations to issue the Sharia-compliant financial instrument, Dmitriev believes. VEB plans to send a group of specialists to Gulf countries to study rules and regulations of Islamic finance in order to recommend possible legislative changes to Russia's central bank. “Our banking laws should be adapted to the specific nature of this financing,” Dmitriev said, citing the experience of London, which had become one of the biggest centres for Islamic finance outside the Islamic world. Read more