Uzbekistan Updates Regulations for Islamic Banking Framework

Tashkent, Uzbekistan (UzDaily.uz) — The Central Bank of Uzbekistan has amended and supplemented eight departmental regulations as part of efforts to strengthen the legal framework for the introduction of Islamic banking. All of the amended documents have been officially registered.

The regulator said the changes were prepared following updates to legislation aimed at developing Islamic banking in the country.

The amendments affect regulations governing commercial banks' liquidity management, corporate governance, single-borrower and connected-borrower risk limits, banks' internal audit, external audits of banks and banking groups, the activities of guarantee providers, contributions to the Deposit Guarantee Fund, and bank capital adequacy requirements.

Under the amendments, these requirements now also apply to banks and microfinance banks engaged in Islamic banking activities.

The revised regulations also introduce provisions governing the licensing of Islamic banking activities, the conduct of Islamic financial transactions, the application of Islamic financial standards, the use of investment deposits, Islamic financial instruments, the development of Islamic finance policies and portfolios, and the activities of banks' Islamic finance boards.

The Central Bank said the amendments are intended to establish the regulatory framework necessary for the development of Islamic banking services in Uzbekistan.