ISLAMIC BANKING: VTB mulls Russian debut on sukuk market – Reuters
THE ‘BRAHMINS’ IN UPA FINANCE MINISTRY AND RBI ARE DRAGGING THEIR FEET OVER ISLAMIC BANKING AND FINANCE, SOLELY ON COMMUNAL GROUNDS.
THEY ARBITARILY DENY THE OPPORTUNITIES OF SHARIA BANKING TO 150 MILLION INDIAN MUSLIM CITIZENS OF INDIA WITHOUT PROVIDING THEM ANY ALTERNATIVE FINANACIAL AVENUES FOR THEIR ISLAMIC FINANCIAL NEEDS. IN AS MUCH AS INDIAN CONSTITUTION FULLY GUARANTEES RELGIOUS FREEDOM, INDIAN GOVERMENT HAS UNCONSTITUTIONALLY WITHHELD ANY MOVE ON INTEREST FREE BANKING, ESPECIALLY TO CATER TO THE RELIGIOUS DUTIES ENJOINED ON MUSLIMS BY THEIR RELIGION. THIS IS A VERY SERIOUS AND ONGOING DENIAL OF INDIAN MUSLIMS’ RELIGIOUS FREEDOM RIGHTS.
IT SHOULD BE AN EYE-OPENER TO THESE COMMUNAL ‘BRAHMINS’ THAT EVEN RUSSIA HAS TAKEN STEPS TO OPEN NEGOTIATIONS WITH ISLAMIC BANKS WITH A VIEW TO INTRODUCE SHARIA PRODUCTS.
Ghulam Muhammed, Mumbai
VTB mulls Russian debut on sukuk market
Wed Mar 18, 2009 10:00am EDT
MOSCOW, March 18 (Reuters) – Russia’s second largest bank VTB (VTBR.MM) may become the country’s first issuer of sukuk or Islamic bonds and is considering a deal worth several million dollars, VTB’s investment banking head said on Wednesday.
Russian companies need to be more creative about raising capital as usual sources of funding have dried up in the global credit crunch and around $100 billion of foreign corporate debt payments are due this year. “We are looking at the possibility of entering this market (Islamic finance) — both for us and for our clients,” VTB Capital head Yuri Solovyov told journalists, adding that an issue from VTB could be worth several million dollars.
He declined to name which other Russian companies had expressed interest in such financing.
Globally, $14.9 billion worth of sukuk were issued last year, less than half 2007’s issuance, according to Standard & Poor’s.
To comply with Islam’s ban on interest, sukuk are structured as profit-sharing or rental agreements, and returns are derived from underlying physical assets such as commodities or real estate. Investment, pork, alcohol, gambling and pornography is banned.
To date there have been no Russian issuers of sukuk.
VTB Capital and Liquidity Management House, a subsidiary of Kuwait Finance House (KFIN.KW), on Wednesday signed a protocol of intention aimed at cooperating in the development of Islamic finance in Russia and other former Soviet countries. (Reporting by Oksana Kobzeva, writing by Toni Vorobyova; Editing by David Cowell)
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