Uzbekistan has approved new licensing regulations for Islamic banks and Islamic banking windows, creating a legal framework for Shariah-compliant financial services in the country. The new rules allow:
- dedicated Islamic banks to obtain licenses;
- existing commercial banks to launch Islamic banking windows;
- all Islamic banking operations to be supervised by the Central Bank and monitored by Shariah supervisory boards.
Unlike conventional banking, Islamic finance prohibits interest-based lending and instead relies on profit- and risk-sharing principles. Financial instruments such as Murabaha, Musharaka, Mudaraba, Ijara, and Istisna can now be offered under the new framework.
The move comes as the global Islamic finance industry continues to expand rapidly. Today, global Islamic finance assets exceed $4 trillion, making it one of the fastest-growing segments of the financial sector. Analysts expect the market to continue growing over the coming years, attracting increasing attention from governments and financial institutions worldwide.
For Uzbekistan, the opportunity is significant. With more than 95% of the population identifying as Muslim, demand for Shariah-compliant financial products has long been viewed as an untapped market.
According to the Central Bank’s roadmap, Uzbekistan aims to establish 10 Islamic banks by 2030, while three state-owned banks are expected to launch Islamic banking windows.
The new framework is expected to do more than expand financial services for domestic customers. It could also strengthen Uzbekistan’s investment ties with Gulf countries, Malaysia, and other major Islamic finance markets. The regulations may also:
- encourage foreign Islamic banks to enter Uzbekistan;
- pave the way for new financial instruments such as sukuk;
- broaden financing opportunities for startups and small and medium-sized businesses.
The introduction of Islamic banking marks one of the country’s most significant financial sector reforms in recent years. The next key question is which local and international banks will be the first to enter Uzbekistan’s emerging Islamic finance market.
