On October 23, the Central Bank of Uzbekistan (CBU) issued its first official license for Islamic banking services to Open Bank Joint-Stock Company. This milestone represents a significant advancement in the nation’s long-term strategy to expand access to financial services and integrate more capital into the formal banking system.
The move follows years of legislative and institutional preparation. In 2019, the country joined the International Islamic Trade and Finance Corporation and the Investment and Export Credit Insurance Islamic Corporation. President Shavkat Mirziyoyev has been a vocal proponent of these changes, stating in his 2020 address to parliament that the time had arrived to establish a legal framework for Islamic financial services. During a 2023 pre-election meeting in Namangan—a region historically known for its stricter adherence to Islamic traditions—Mirziyoyev explicitly promised that an Islamic financing system would be implemented.
The regulatory environment has evolved significantly since 2022, when microfinance organizations were first permitted to offer Islamic products. The CBU finalized formal regulations for these services in 2024 and subsequently joined the Islamic Financial Services Board (IFSB). In 2025, Tashkent hosted the 20th International Shariah Scholars Forum in Islamic Finance, marking the first time the event occurred outside of Malaysia. Furthermore, the Legislative Chamber of the Oliy Majlis passed a draft law on Islamic banking in 2024, followed by a comprehensive law signed by President Mirziyoyev in March 2026, which established requirements for licensing, regulation, and taxation. By July 2026, the CBU had formed a five-person Islamic Finance Council, which includes representatives from the Muslim Board of Uzbekistan.
The government’s strategy is built on the hope that this sector will capture savings and loan demand from a population that has historically avoided conventional banking. While estimates vary, the U.S. Department of State and Human Rights Watch suggest over 80 percent of the population follows Islam, while the Committee on Religious Affairs of Uzbekistan reported the figure at 94 percent in 2015. Bakhrom Nomonov, the former board chairman of Apex Bank, estimated in 2023 that 20 percent of Uzbek citizens avoid traditional loans due to religious beliefs, suggesting that Islamic finance could potentially attract up to $10 billion annually.
However, analysts note that success is not guaranteed. Market competitiveness remains a factor, as consumers may favor conventional loans if Islamic alternatives prove more expensive. Additionally, maintaining public trust is critical; the reputation of Islamic financial products is sensitive to the scrutiny of scholars regarding Shariah compliance. Currently, more than 10 commercial banks are preparing to introduce Islamic products, though their long-term impact on financial inclusion remains to be seen. This research was supported by a Marie Curie Staff Exchange within the Horizon Europe Programme (CARSI, no: 101086415).
