Uzbekistan Issues First License for Islamic Banking
The Central Bank has permitted a commercial bank to conduct Islamic financial operations for the first time in history
The regulator's board made the decision to issue the license on 23 October 2026. Open Bank (previously operating under the Smart Bank brand) became the pioneer following the establishment of a new regulatory framework for Islamic financing in the country.
The legislative foundation for Islamic banking came into force in the summer of 2026. Unlike the traditional banking system, where income is generated through interest, Islamic finance relies on trade markups, rental payments, and profit-sharing among transaction participants.
The license allows Open Bank to launch six basic financial instruments: - Mudaraba: attracting and investing deposits with the distribution of the resulting profit; - Murabaha: purchasing goods by the bank with their subsequent sale to the client in installments with a fixed markup; - Ijara: Islamic leasing of property, including with the right of subsequent purchase; - Wakala: providing services or attracting funds based on an agency agreement; - Salam: advance payment for goods with a fixed term for subsequent delivery; - Musharaka: partnership financing of projects and participation in the authorized capital of companies.
To comply with all Sharia norms, Open Bank has established a special Council for Islamic Finance, and the operations themselves will be conducted under separate accounting conditions.
The launch of Islamic banking is a key stage in the reform of Uzbekistan's banking sector. The development of this direction will attract approximately $1 billion in additional investments and deposits into the country's economy over the next five years.
According to the regulator, more than ten commercial banks in the republic have already begun preparing the infrastructure for launching 'Islamic windows,' including Agrobank, Asakabank, Ipak Yuli Bank, and Orient Finans Bank. Before the adoption of the special law, similar services in Uzbekistan could only be provided by certain microfinance organizations.
