AhlulBayt News Agency (ABNA): Uzbekistan is preparing to launch Islamic banking after the Senate approved legislation establishing a legal framework for Sharia-compliant financial services, a move officials describe as a major step toward broadening financial access and attracting new investment.
The law sets out licensing requirements, tax mechanisms, and regulatory structures for Islamic financial institutions, allowing banks either to operate fully in accordance with Islamic principles or to offer “Islamic windows” alongside conventional services. Officials expect the reforms to support the development of the digital economy, expand financing options for businesses, and enhance financial inclusion for citizens who avoid conventional banking for religious reasons.
Under the legislation, core Islamic finance models, including Murabaha, Mudaraba, Musharaka, Wakalah, and Salam, are formally recognized. These mechanisms are expected to diversify Uzbekistan’s financial market and provide alternatives to interest-based loans, particularly for small and medium-sized enterprises.
According to officials, the Central Bank will establish a specialized Islamic Banking Council to oversee compliance with Sharia standards. In addition, new amendments to tax legislation, including value-added tax exemptions for certain transactions, have been introduced to reduce costs and encourage new market entrants.
Estimates suggest that Islamic banking could generate up to $5 billion in new annual financing capacity. A United Nations Development Programme survey also found that 68 percent of the population and 60 percent of businesses in Uzbekistan prefer financial services aligned with religious principles.
Experts say the implementation of these reforms could channel foreign capital and domestic savings into sectors such as infrastructure, trade, and entrepreneurship. If the rollout proceeds according to schedule, the first Islamic banking products are expected to enter the market within the next six to twelve months.
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