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Uzbekistan’s Central Bank has issued the country’s first licence authorising full Islamic banking operations, awarding it to the joint-stock company Open Bank following a formal resolution by the bank’s governing board.
The licence is grounded in Article 5-1 of Uzbekistan’s Law on Banks and Banking Activity, which sets out the specific Islamic financial operations that a licensed institution may conduct. Those operations include profit-sharing financing and the acceptance of investment deposits on profit-distribution terms; agency-based lending and deposit-taking; instalment-sale financing; advance-payment financing for goods; joint-venture financing and equity participation in legal entities; and Islamic leasing — known as ijarah — with an option to purchase.
What the Licence Permits
Beyond those enumerated instruments, the Central Bank confirmed that licensed Islamic banks may also conduct other Islamic financial operations consistent with internationally accepted banking practice, provided they do not conflict with Uzbek law. The formulation gives Open Bank flexibility to introduce additional Sharia-compliant products as the market develops, without requiring fresh legislative action for each instrument.
The Central Bank used the announcement to remind the public to verify any bank’s licence status on the regulator’s official website before using its services — a standard consumer-protection notice that carries added weight given that this is an entirely new category of licence in the country.
Why It Matters
The issuance marks a structural shift in Uzbekistan’s financial sector, which has until now operated exclusively under conventional banking rules. Islamic finance prohibits interest and instead structures returns around asset-backed transactions, profit-sharing and leasing arrangements — a model that appeals to observant Muslim customers who have historically kept savings outside the formal banking system. Uzbekistan has a predominantly Muslim population, and regulators have signalled for several years that bringing Islamic finance into the licensed framework could deepen financial inclusion. Open Bank becomes the sole institution legally authorised to offer these products, at least until further licences are granted.