Uzbekistan introduces comprehensive Islamic banking regulatory framework

29 March 2026

Law No. 1126, published on 28 March 2026, introduces amendments and additions to multiple legislative acts to establish a comprehensive legal framework for Islamic banking activities in Uzbekistan. It enters into force from the date of its official publication.

What has changed and why it matters

Uzbekistan has until now lacked a dedicated statutory framework for Islamic banking. Law No. 1126 addresses this by amending five key legislative instruments - the Law on the Central Bank, the Civil Code, the Law on Banks and Banking Activities, the Law on Credit Information Exchange, and the Tax Code - to integrate Islamic financial principles into the country's regulatory architecture.

The amendments respond to growing demand for Sharia-compliant financial services and align with the government's broader strategy to diversify the banking sector, attract investment from Islamic finance markets, and expand financial inclusion.

Key changes to banking legislation

The Law on Banks and Banking Activities receives the most extensive amendments. Key provisions include:

• Definition of Islamic banking: a new statutory definition establishes "Islamic bank" as a bank carrying out banking activities in accordance with Islamic financial standards, and introduces the concept of "Islamic financial standards" as standards for conducting banking activities adopted by the Central Bank or other authorized body
• Islamic Financial Council: each Islamic bank must establish an Islamic Financial Council responsible for ensuring compliance with Islamic financial standards, issuing opinions on compliance, and monitoring adherence to Sharia-compliant practices
• Council functions and powers: the Islamic Financial Council advises on compliance with Islamic financial standards, reviews regulatory documents, provides opinions on related matters, and reports on the bank's risk profile and business plans
• Banking operations: Islamic banks may perform a defined set of financial operations including profit-sharing investment deposits, asset-based financing, trade finance through intermediary purchases, partnership (musharaka) financing, and leasing (ijara) arrangements
• Licensing regime: a separate licensing track is created for Islamic banking activities, with the Central Bank responsible for issuing, suspending, and revoking licenses specifically for Islamic bank operations
• Microfinance extension: new articles (75¹ through 75⁵) extend the Islamic banking framework to microfinance organizations, allowing them to conduct microfinance activities in accordance with Islamic financial standards

Changes to the Central Bank law

The amendments to the Central Bank law (Law No. 154-I) establish the Central Bank's authority over Islamic banking regulation, including:

• Setting Islamic financial standards for credit institutions
• Defining requirements for Islamic Financial Councils
• Overseeing compliance with Sharia-compliant banking standards

Civil Code amendments

Amendments to the Civil Code address deposit protection and financial intermediation:

• New provisions on charges and interest collected on deposits in accounts with Islamic banks
• Modified rules for funds collected and other income under Islamic banking arrangements (Article 763)
• Clarified treatment of interest on credits, deposits, and fund rates for Islamic financial operations (Article 762)

Tax Code amendments

The Tax Code is amended to ensure that Islamic banking transactions receive appropriate tax treatment, including provisions on credit information exchange requirements for Islamic banking operations.

What this means for your business

The introduction of a comprehensive Islamic banking framework represents a significant structural shift in Uzbekistan's financial sector. For international companies operating in or entering the Uzbek market, the key implications include:

• New financing options: companies may now access Sharia-compliant financing instruments including trade finance, leasing, and partnership arrangements through licensed Islamic banks
• Investment flows: the framework is designed to attract capital from Islamic finance markets in the Gulf states, Malaysia, and Turkey, potentially increasing overall investment flows into Uzbekistan
• Financial inclusion: expansion of Islamic financial services to microfinance organizations broadens access to compliant financial products across the economy
• Regulatory clarity: the dedicated licensing and supervision regime provides legal certainty for both providers and users of Islamic financial services

Companies in financial services, fintech, and those seeking alternative financing structures should monitor the Central Bank's implementing regulations, particularly the adoption of specific Islamic financial standards and the licensing requirements for new Islamic banking entities.