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April 2026 – On 27 March 2026, the President of Uzbekistan signed Law No. LRU-1126 (the “Islamic Banking Law” or “IBL”), marking a historic milestone in the development of Uzbekistan’s financial sector.
The Islamic Banking Law introduces a dual banking system designed to expand the scope of available financial services and introduce innovative banking products aligned with international Islamic finance standards. This framework enables Sharia-compliant financial services to operate concurrently and on equal footing alongside conventional banking.
The Islamic Banking Law introduces comprehensive amendments to the Civil Code, Tax Code, Law on the Central Bank, and Law on Banks and Banking Activities. Its primary objective is to diversify financial instruments, attract foreign direct investment from OIC countries, and integrate funds from the shadow economy into the formal banking sector, according to official statements.
The Islamic Banking Law will enter into legal force on 28 June 2026 (three months following its official publication). During this transition period, the Central Bank of Uzbekistan is expected to issue a series of secondary regulations detailing specific prudential requirements and operational standards Islamic banks and conventional banks running so called “Islamic window”.
Given Uzbekistan’s constitutional status as a secular state, the IBL represents a landmark effort to integrate Sharia-compliant financial concepts into a civil law statutory framework, introducing specialized profit-sharing models while striking a delicate balance between international Islamic finance standards (such as AAOIFI) and national secular legislation.
Beyond its legal significance, in practical terms, the IBL is expected to have broader commercial and economic implications for Uzbekistan’s financial sector. In particular, introduction of IBL may widen access to formal financial services for customer groups that so far remained outside the conventional banking system, for religious or product-structure reason.
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