New Era for Islamic Finance in Uzbekistan
By Sarina Tareen
Islamic banking in Uzbekistan was operating in a grey zone for years. There was an increasing demand for Shariah-compliant financial services; however, banks were not equipped with a legal structure to provide them. The reform was initiated in September 2025, when the Legislative Chamber of the Oliy Majlis passed the first draft of the Islamic banking law. The bill aimed to establish a legal foundation for Islamic banking and attract new investment into Uzbekistan’s financial sector. In March 2026, President Shavkat Mirziyoyev outlined plans to bring Islamic finance to banking and establish an Islamic Finance Council under the Central Bank. On 27 March 2026, he signed Law No. O’RQ-1126, which officially introduces Islamic banking in Uzbekistan. The law entered into force on 29 June 2026. Just weeks later, the Central Bank established an Islamic Finance Council to guide the sector’s development and prepare national Islamic finance standards. The shift is more than a regulatory reform. It symbolizes Uzbekistan’s aspiration to become an Islamic finance hub in Central Asia and strengthen economic cooperation with Muslim-majority markets.
Islamic finance is one of the most dynamic areas of world finance. According to the World Bank he global Islamic finance industry is valued at nearly US$4 trillion. Islamic finance, unlike traditional banking, does not accept Riba (interest). Instead depends on profit and loss sharing, trade, leasing and asset-backed financing. This will help attract investment into the formal banking sector, Uzbekistan hopes. The International Finance Corporation survey reveals that 56% of those surveyed will not use traditional loans because of religious concerns. Meanwhile, 75% said they would use Islamic financial services if they were available. The new law establishes a dual banking system. Islamic “windows” can be established within conventional banks, and conventional banks can also be licensed as fully Islamic banks. It also establishes legal frameworks for Islamic financial products like murabaha (cost-plus sale), mudaraba (profit-sharing partnership), musharaka (joint investment partnership), ijara (Islamic leasing) and salam (advance payment for future delivery). Uzbekistan now has new licensing regulations, tax breaks, governance norms and oversight requirements from Shariah.
To oversee these reforms, the Central Bank created a five-member Islamic Finance Council. The council will draft national Islamic finance standards, advise banks and microfinance institutions, and recommend regulatory reforms. It will also represent Uzbekistan at the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), the world’s leading standard-setting body for Islamic finance. Most council members are Islamic law scholars from the Fatwa Centre under the Muslim Board of Uzbekistan. The council is chaired by Saidjamol Masayitov, while banking expert Akhrorjon Sadullayev, who has more than 20 years of experience in finance and auditing, provides technical expertise.
The government has set challenging goals. They believe that 10 Islamic banks will be active by 2030, and several state-owned banks are getting ready to open Islamic banking windows. The Central Bank also believes the reforms could draw in an additional $20-25 billion in new deposits and investment as previously unbanked savings enter the formal financial system. These reforms complement the overall economic strategy of Uzbekistan. The government is keen on enhancing financial inclusion, diversifying its sources of funding and seeking investment from Muslim-majority countries. Creating a law is just the first step. There remains a need for the banks to hire trained Shariah experts, clear regulations and strong supervision. It will also take time to establish an Islamic capital market, including sukuk (Islamic bonds). These reforms, if they are executed properly, could bring investment, increase financial inclusion, and make Uzbekistan the number one Islamic finance market in Central Asia.