Draft Law on Islamic Banking Passed by Legislative Chamber

Tashkent, Uzbekistan (UzDaily.com) — The Legislative Chamber of the Oliy Majlis has reviewed in its second reading a draft law aimed at introducing Islamic banking activities in Uzbekistan.

During the session, it was noted that in recent years the country has been undertaking extensive efforts to modernize the banking system and expand the range of financial services in line with international experience. In this context, the need has arisen to introduce new types of banking services, including Islamic banking.

The draft law introduces amendments and additions to a number of regulatory acts, establishing the legal framework for conducting Islamic banking activities.

The document enshrines rules governing Islamic financial operations and takes into account previously submitted proposals regarding financial standards and investment deposits.

The draft specifies requirements for obtaining a license for Islamic banking, defines key concepts related to Islamic financial instruments, and permits banks to conduct trade financing for clients in accordance with Islamic standards.

It also allows for the creation of legal entities and participation in the charter capital of other companies.

Lawmakers emphasized that the introduction of regulations governing taxation of Islamic financial operations will contribute to expanding the volume of financial services provided.

Adoption of the draft law will establish a legal basis for the phased introduction of Islamic banking in the country, helping to reduce the shadow economy and attract foreign investment.

The draft law was approved by the deputies and forwarded for consideration by the Senate.