Law on Islamic Banks is being adopted in Uzbekistan

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On 11 November, the Legislative Chamber of the Oliy Majlis reviewed and approved, in the second reading, a draft law aimed at introducing Islamic banking in Uzbekistan. The document has been forwarded to the Senate. The information was reported by the press service of the Legislative Chamber.

It was noted that in recent years, Uzbekistan has been carrying out large-scale efforts to introduce modern banking services and develop the banking system by taking into account international experience. At the same time, the need has arisen to expand access to financial services and introduce new types of banking products. The draft law proposes amendments to several pieces of legislation to establish the legal framework for Islamic banking operations in the country.

During discussions, members of parliament expressed support for the inclusion of legal norms regulating Islamic banking and financial transactions in the draft. They welcomed the clear definition of licensing requirements for Islamic banking, clarification of key concepts related to Islamic finance, and provisions allowing banks operating under Islamic finance principles to conduct trade activities for client financing, as well as to establish legal entities and acquire shares or stakes in their charter capital.

Deputies also emphasized that the introduction of specific taxation procedures for Islamic finance transactions will provide a significant boost to the expansion of financing-related services.

It is worth noting that in 2022, work began on launching Islamic windows in more than ten banks. The president has stated that the widespread introduction of Islamic finance in Uzbekistan could generate up to 5 billion USD in additional resources and have a significant positive impact on competition in the banking sector.

In 2024, Deputy Chairman of the Central Bank Behzod Hamroev announced that a draft law on Islamic finance had been prepared and would be submitted to parliament by the end of the year. The draft was considered on 16 September at a session of the Legislative Chamber. At the meeting, Deputy Chairman of the Central Bank Abrorxo‘ja Turdaliev stated that a separate license will be introduced for conducting Islamic banking activities in the country.