NEWS

President of Uzbekistan Shavkat Mirziyoyev has signed a law aimed at developing Islamic banking in the country. Earlier, the President was presented with key initiatives to strengthen Uzbekistan’s investment appeal, including the creation of the Tashkent International Financial Centre (with potential to attract up to $25 billion into the economy), the launch of the digital hub Enterprise Uzbekistan (expected to generate up to 300,000 jobs and $5 billion in exports by 2030), and the introduction of Islamic banking as one of the strategic tools for financial sector development. According to market estimates, more than ten banks are already prepared to roll out relevant products.

What is Islamic banking?

Islamic banking is an alternative financial system based on Sharia principles. It prohibits charging interest (riba) and excessive uncertainty or risk (gharar), and requires that every transaction be backed by real assets.

Key instruments expected to be introduced in Uzbekistan include:

• Murabaha — instalment-based sale of goods with a fixed markup;
• Mudaraba — profit-sharing investment partnership;
• Wakala — agency-based fund management model;
• Salam — advance payment for future delivery of goods;
• Musharaka — joint financing of projects;
• Ijarah — Islamic leasing model.

To regulate the new segment, a Shariah Finance Council is being established under the Central Bank, responsible for setting standards and rules. Similar structures are also expected to be introduced within commercial banks.

The law also provides tax incentives, including VAT exemptions on certain margins and the alignment of Islamic leasing with financial leasing standards.

Islamic finance development in Central Asia

Islamic banking is already developing actively across the region. According to the Eurasian Development Bank, total Islamic finance assets in Central Asia could reach $6.3 billion by 2033, while sukuk issuance may reach $5.6 billion.

Kazakhstan remains the regional leader in Islamic finance. In March 2026, the regulator approved the establishment of a subsidiary of Abu Dhabi Commercial Bank (ADCB), which is already implementing its second project in the country. In January 2026, a new banking law was also signed, including a dedicated section on Islamic banking development.

Kyrgyzstan was the first country in the region to introduce Islamic financial principles. The first Islamic bank was launched back in 2006. By the end of 2025, six commercial banks were offering Islamic financial services, with total financing reaching 19.2 billion som. The legal framework was established in 2009, and in 2026 the regulator continued to update the sector’s regulations.

Prospects for Uzbekistan

Uzbekistan is building its Islamic banking framework based on the experience of neighbouring countries. The relevant provisions are already embedded in the “Uzbekistan–2030” strategy, confirming the direction at a national level. The first Islamic “windows” in conventional banks are expected to appear as early as this year.

More broadly, the region is moving towards a new investment ecosystem. Islamic finance is gradually becoming a tool both for mobilising domestic capital — including through the participation of religious populations — and for attracting foreign investment, particularly from Gulf countries.