Source: Islamic Economics Business, Finance | 19 December 2011
Iiyas Zaripov, graduate of All-Russia Distance Institute for Finance and Economics, Ph. D. (Econ.) shares his opinion with MuslimEco.ru readers about process of studying in International Centre for Education in Islamic Finance (INCEIF), Malaysia and provides his vision of Islamic banking in Russia.
Ilyas Abdulbyarovich, you are one of the first Russian students of the CIFP (Chartered Islamic Finance Professional) program of INCEIF. What has induced you to go on training?
Growing demand of potential customers – Muslims for Islamic financial products (the number of Muslims has considerably increased during the last years), and also the needs of the Russian financial institutions in the funds of Islamic countries and banks investments were the reasons of the decision of the Board of Directors of one Russian private leading banking group to send its employees to get education under CIFP. I was the first who was approved by INCEIF.
Many Russian financial institutions consider development of Islamic financing and working out of Islamic financial products for the Russian consumers as an important point within bank’s strategic plan of development. The structure and nature of Islamic financial institution’s (IFIs) transactions are more stable and resilient; the recent financial crises of this decade have shown it. Any of IFIs was not negatively influenced by the crises; their assets and trust of clients have only grown. Here, in Malaysia, in a bank with both Islamic and conventional products, traditionally more clients prefer Islamic products.
But I would like to underline that in order to develop Islamic Finance in Russia it is necessary to have certified experts and, it is desirable, that experts were trained in the country where so-called dual banking system is in place – I mean the presence of both Islamic and conventional banks. First of all, it is, certainly, Malaysia.
Second, it is necessary to develop legal schemes within the Russian legislation to start IFIs activities in Russia. Or, as an alternative way – to change the Russian banking legislation, aiming to create laws related to Islamic finance and IFIs. Council of muftis of Russia works much in this direction. It would be desirable to thank you for these efforts. That’s why I think that we need the certificated experts to work in Russia.
Besides, it is necessary to speed up. Many foreign banks wish to open in Russia the branches to work under Shari’ah principles. The bank, which would become the first to carry out these operations, would take a considerable share of the market. It will be the pioneer and a dominant in the market and this would determine high profits and incomes of bank, its financial position and rank for long-term period.
When did you begin to study and are there already any results?
I began to study in September, 2011. At the moment I have handed over all assignments and now I’m preparing to pass exams in the following subjects:
- Shariah Aspects of Business and Finance
- Islamic Economics
- Islamic Financial Institutions and Markets
- Shariah Rules in Financial Transactions
- Deposit and Financing Operations of Islamic Finance
- Reporting of Islamic Financial Transactions
These are six subjects from six possible in this semester.
What actions should the Russian banks undertake in order to develop Islamic banking?
It seems to me (this is my personal opinion) that many Russian banks should form special Islamic finance department with the right to attract experts from other divisions of the bank. I would mention the following units: risks management, internal control, strategic development, marketing of new products, their sale, and liaison with branches, accountants etc. It is necessary to begin with 30-50 employees. It is important to form Shari’ah council. It is a new committee for bank. Here it is necessary to define the status of employees in this Council: staff getting the salary and bonuses, or outsourcing (i.e. people are invited to temporary job). Taking into consideration the fact that in the beginning Shari’ah Council will examine all transactions and anew to create some directions of work, it is necessary to employ experts, having signed with them the long-term contract (minimum 3-5 years). Therefore taking into account Shari’ah Council I would suggest bringing in the list of staff from 35 to 55 persons.
Could you tell about the educational process in INCEIF?. You are a graduate of the Russian financial high school. Is there any difference in teaching a financial subject in Russia and in Malaysia
I would highly estimate the educational process in INCEIF. My opinion includes both the level of teacher’s competence, and educational premises, equipment, intensity and supervision. In the beginning the studies were in the form of lectures and presentations. Each class is equipped by a projector, the premise is conditioned, and there is Wi-Fi Internet. Before the beginning of a lecture, each professor puts his papers on a website and each student can read and follow the material on PC monitor. Then there are seminars with participation of students, there is homework, both individual, and group. Basically, it is preparation of presentations within the framework of the given subject. Thus, during his studies each student participates in preparation of minimum 2 presentations on each subject. Sometimes the most active students prepare and present more than 4 presentations on a subject. There is good stimulus for student to find, examine new interesting topics and present it to classmates because for each presentation he gets additional marks. After each presentation there is a discussion under the supervision of the teacher and with his active participation.
The studying schedule is very convenient. The classes are since Monday till Friday from 9 am till 5 pm (usually Friday is a short day, i.e. classes are only till a lunch). The lunch break is from 12 am to 2 pm –this is unusually long for Russia. Within one day there are two lectures on two subjects. During a day the students study approximately 5.5 hours (excluding two 15-minutes breaks between lessons).
Each student has the right to use library, take books, work on the computers, use scanner, printer and copier. Additional payment is for using paper only (the price is symbolical). It was done to prevent wasting paper by students. Moreover, I would like to underline strict disciplinary requirements during training. The student under no serious reason can miss not more than 2 lectures on each of subjects, if not he isn’t allowed to pass examinations and is obliged to pass the lectures on the subject once again, having paid for it one more time.
Separately it would be desirable to mention a dress-code which students should follow when visiting INCEIF campus. Shorts, sports cloths and open vests are prohibited for male students. For females a dress-code is still more religious – completely closed hair is a must, they should wear the clothes which covers hands and legs. The footwear can be opened, but shouldn’t be beach-style. In case of violation of dress-code requirements the student isn’t permitted to classes and is sent back home to change clothes, absence at the lecture is regarded in this case as disrespectful reason.
Is there specificity in Islamic finance studying?
To my mind, there is no considerable specificity in studying Islamic finance. Techniques are checked up, teachers are qualified. Desire to study and acquire knowledge – these are the pillars of successful studying and acquisition of knowledge and professional skills in this sector. Though, knowledge of basic of Islam, including texts of the Holy Quran and also the minimum understanding of the Arabian language – are the things which would considerably facilitate understanding of material provided. I know many examples when the knowledge of Islam and Islamic worldview and also the Arabian language really help students to study. Of course this doesn’t mean that those who don’t know it, the CIFP course would be impossible to learn, but, anyway, presence of such knowledge and, the most important thing, «Islamic thinking» considerably helps to master the material.
What is the share of non-Muslims studying in CIFP? What is their interest?
As for the share of non-Muslims students under CIFP it is usually minimum. There are no non-Muslims among my classmates, but I know there were some students earlier. I think that interest has been caused by the fact that Malaysia is really the Islamic country – more than 60 % are Malays and practice Islam. The majority of banks are Islamic, it is easier to find job with Islamic financial institutions. Traditionally IFIs have more support and respect, either from the authorities as native population. All these factors push people of other religions to be interested in the Islamic finance and to get education in Islamic finance. However here it is necessary to prove that your aspiration to be trained in this area isn’t casual. The example of this year shows that sometimes it is more difficult to prove for non-Muslims.
What have you acquired during the course “Islamic finance” provided by MIRBIS (Moscow International Higher Business School)?
Training at MIRBIS has given me initial complex of knowledge in the sphere of Islamic finance, in MIRBIS I have got acquainted with people – experts in this area and have realized perspectives of Islamic Finance at a global scale. Thanks to this course, its organizers and teachers, I have understood that it is the area in which I would like to specialize. Besides, the certificate of MIRBIS, translated into English, helped me to pass selection to INCEIF as has shown that I had been researching this topic for a long time and had already got initial knowledge of the Islamic finance in Russia.
In this connection would like to express gratitude to MIRBIS, to Council of Muftis of Russia and personally to Alexander Babaev and you, Madina for organizing such important and unique course in Russia.
Being in Malaysia you monitor the latest developments in the market of the Islamic finance in this country. What is the most significant event?
Yes, of course, we are monitoring all political and economic events and trends related to Islamic Finance. There are quite a lot of them, but what is really pleasant for me that International Financial Institutions and Multilateral Development Banks (IMF, World Bank Group, EBRD, BIS, and ECB) began to actively develop this topic. These international organizations assist to issue Islamic bonds (Sukuk), carry on negotiations for rapprochement of accounting standards, principles of bank supervision, conducted researches, set special ratings for Islamic markets, invite to the their important Economical Forums and meetings the Governors of the central banks of the countries with Islamic Finance. It testifies that the Islamic financial model is recognized all over the world and will develop in new countries where till now it hasn’t been presented. This is very good sign. IFIs will bring stability, predictability and justice in the world of finance will force many people to believe that the bank is not usurer, but it is real partner, the skillful adviser and the experienced assistant in business.
How your opinion about prospects of the Islamic finance in Russia changed after your arrival and studying in Malaysia?
I considered Islamic Finance as a successful and fair business in Russia. But Malaysia on its example has shown how it is possible to construct dual banking system in the multinational and multiconfessional country that will allow developing both conventional and Islamic financial institutions (banks, the insurance companies, the financial companies, funds). Experience of Malaysia should be studied to be used in Russia. Here it is possible “to add to working tools” the methods of supervising bodies (the Central bank of Malaysia), legislative base, and interaction of conventional and Islamic banks, using the accounting standards. Also it is possible to consider experience on transition to such system, what steps should be undertaken by authorities, business units, participants of the market, the population in order to start building the new structure of financial system of Russia with IFIs presence most effectively and without serious shocks.
Malaysia is considered now the safest country for residing and attractive from the point of view of business dealing and investments. Russia should follow it and use unique experience of this country for developing banking and a financial system with the structure allowed to operate both conventional and Islamic financial institutions. It will bring benefit to our country, and also the citizens living in it.
P.S.: And one more question, it is simply interesting, why are you on a photo in national clothes? So is it more convenient?
This is celebratory clothes. I have sent to you a photo which was made during our presentation. And the presentation is a performance to audience. On the first presentation I was in the European suit. On the second presentation has decided to put on a Muslim dress. It has underlined a topic of our presentation – a role of the international financial institutions in the Islamic finance and has directed listeners to a correct trend. Moreover, each performance is a show. The first, it is necessary to draw attention of listeners, people pay attention to appearance and clothes. I was satisfied by our job and have received much favorable estimation from my colleagues-students.
Interviewed by Madina Kalimullina, Islamic Economics Business, Finance