Uzbekistan Issues First Islamic Banking License — Open Bank Receives It

Uzbekistan's Central Bank on October 23 issued Open Bank the country's first-ever license to conduct Islamic banking operations. The document was registered as license No. 1-I pursuant to Resolution No. 28/1 of the Central Bank Board.

The license grants the right to conduct financial operations provided for by Article 5¹ of the Law on Banks and Banking Activities. The legal framework for Islamic banking was established by a law dated March 27, 2024, which came into force on June 29. It defines six types of Islamic financial operations: mudaraba (provision of capital with subsequent profit-sharing), wakalah (agency agreement), murabaha (sale of goods on installment with markup), salam (payment for goods prior to delivery), musharaka (joint project financing), and ijara (property lease with option to purchase).

Open Bank shareholders approved the transition to Islamic banking at the annual general meeting on June 29, 2024, and at the same time made the decision to establish an Islamic Finance Board for a three-year term. In July, the Ministry of Justice registered amendments to banking licensing rules, setting out requirements for opening Islamic banks and "Islamic windows" within ordinary commercial banks — including possession of a three-year business plan and risk management mechanisms.

A license is required both for establishing an independent Islamic bank and for opening an "Islamic window" within an ordinary bank. The bank is obligated to maintain separate accounting for operations and establish a specialized division. The Central Bank recommends customers verify that banks hold the appropriate licenses on the regulator's official website.