President Shavkat Mirziyoyev of Uzbekistan reviewed a presentation on introducing Islamic finance into the country's banking system on March 25. According to the head of state's press service, the presentation thoroughly discussed the implementation of Islamic financial services, including instruments such as murabaha (financing through installment sales of goods), mudaraba (financing based on profit-sharing or fund-raising), wakala (providing or attracting funds through agency contracts), salam and istisna (financing clients through joint activities), musharaka (operations like Islamic leasing), and other Islamic financial tools that comply with legislation.

Under the plans, by 2026, at least one commercial bank will launch an Islamic "window" for operations, and in 2026–2030, two banks conducting full Islamic banking activities will be established. Government estimates suggest that through innovations in this sector, an opportunity will be created to attract an additional $1 billion in investments and deposits during 2026–2030, potentially contributing significantly to the national economy.

To ensure systematic management, an Islamic Finance Council will be established within the Central Bank, and separate councils will be organized in banks providing Islamic financial services. These councils will develop standards, assist in rule-making, provide clarifications on contentious issues, review contracts and internal documents, and ensure compliance monitoring.

In an interview with the "Uzbekistan 24" TV channel, Central Bank Chairman Timur Ishmetov stated that after the relevant law is adopted in this direction, the regulator will begin developing by-laws and forming the infrastructure for Islamic financing. Ishmetov said, "First of all, the Central Bank has been tasked with strengthening personnel capacity – if necessary, organizing training and certification of specialists in relevant educational institutions, so that with the emergence of full-fledged banks operating on Islamic finance principles, the regulator is ready to ensure the stability of the banking system."

Ishmetov added that the Central Bank is currently a full member of two international organizations in Islamic finance for accounting and auditing, as well as banking supervision. After the law is signed, it is planned to launch Islamic financial products both in specialized banks and through "Islamic windows" in traditional banks. He emphasized, "For this, all legislative restrictions have already been removed."

Reports indicate that over 10 banks have already begun preparations to work in this direction. Ishmetov noted, "After the law comes into force, a phased expansion of the use of Islamic financing instruments in the banking system is expected." Previously, the Senate approved a law on introducing Islamic banking in Uzbekistan, which provides for licensing Islamic banking activities, introduces a list of Islamic operations, and defines their taxation features.

Source: www.gazeta.uz