Uzbekistan adopts law establishing legal framework for Islamic banking

Uzbekistan has introduced a legal framework for Islamic banking after President Shavkat Mirziyoyev signed amendments to the country’s legislation, enabling the provision of Shariah-compliant financial services and supporting the diversification of its financial sector.

The newly adopted law, titled “On Amendments and Additions to Certain Legislative Acts of Uzbekistan,” sets out the regulatory basis for Islamic banking activities, aiming to expand access to finance for individuals and businesses while attracting international investors and enhancing competition within the banking industry.

“The introduction of this framework is expected to broaden access to financial services for both the general population and the business community,” the government said, adding that the initiative is designed to strengthen the country’s financial ecosystem and support economic development.

Under the legislation, Islamic banking institutions will be permitted to offer a range of Shariah-compliant services, including profit-and-loss sharing investment deposits, client financing through agency agreements, and equity participation in businesses. The law also allows financing through credit sales of goods, advance payments for commodities, and Islamic leasing arrangements that provide clients with the option to acquire ownership of assets.

The framework stipulates that only legal entities holding a licence issued by the Central Bank of the Republic of Uzbekistan will be authorised to conduct Islamic banking activities. These licences will be granted without an expiration date and will be non-transferable, ensuring regulatory oversight and operational stability.

The law is scheduled to come into effect three months after its official publication, allowing the Central Bank and financial institutions time to prepare for the rollout of Islamic financial services. The move positions Uzbekistan among a growing number of countries seeking to integrate Islamic finance into their banking systems to support financial inclusion and attract cross-border investment.