The Thesis
Uzbekistan has 37 million people. Around 88% of them are Muslim. Until June 2026, there was no legal framework for Islamic banking in the country. That is not a gap — it is an entire market waiting to be built.
Law No. ЎРҚ-1126, enacted March 27, 2026 and effective June 29, took that first step. Two weeks later, the Central Bank stood up an Islamic Finance Council — the body that will actually write the standards the law leaves to regulators. That sequence matters: framework first, governance second, banks third. It is a deliberate build order, and it tells you what kind of market Uzbekistan is trying to become.
What the Law and Council Actually Do
The law authorizes Islamic banking activities and gives the Central Bank formal power to approve Islamic finance standards. The Council it created is chaired by Saidjamol Masayitov, chief specialist at the Fatwa Center of the Muslim Board of Uzbekistan, with Muhammadyubkhon Khomidov as deputy. Three other council members — Hikmatilla Toshtemirov, Abdullatif Tursunov, and Akhrorjon Sadullayev of Orient Audit Group — round out the group. Most hold AAOIFI certifications in Islamic finance.
The council’s mandate is to draft unified standards for banks and microfinance organizations operating on Islamic principles — mudarabah, murabaha, musharakah, ijarah — the full menu. Before June 2026, only 12 microfinance organizations were legally offering these products. The law expands the eligible players to commercial banks, but the standards they must follow are still being written.
Where the Market Stands
The early numbers are both impressive and small at once. In the first five months of 2026, Uzbek microfinance organizations extended UZS 22 billion in Islamic financing. First-quarter issuance alone — UZS 11.2 billion — represented an eightfold surge compared to Q1 2025.
An eightfold surge sounds transformative. In absolute terms, at current exchange rates, UZS 22 billion is roughly $1.7 million. For context, the global sukuk market issued $129 billion in the first half of 2026 alone. The surge is real; the base is still almost nothing. That is precisely why the framework matters more than the current numbers — it is the infrastructure that determines whether Islamic finance in Uzbekistan scales to something significant, or stays a footnote.
The government’s own projections hint at ambition: a presidential directive from March confirmed plans to launch at least one Islamic window in a commercial bank in 2026, with two fully fledged Islamic banks targeted for the 2026–2030 window. The cumulative investment and deposit mobilization target for that period is $1 billion.
The Limit Worth Naming
A law and a council are necessary conditions for a functioning Islamic finance market. They are not sufficient. The standards the council is writing do not yet exist. The commercial banks have not yet opened their Islamic windows. The consumer and SME products have not been designed, priced, or marketed. The Sharia audit capacity needed to validate these products at scale is thin.
Central Asia’s broader Islamic banking ambitions — a projected $6.3 billion in Islamic banking assets by 2033 across the region — rest heavily on Kazakhstan and Uzbekistan. Kazakhstan is further along. Uzbekistan is faster-moving right now, but is building from a lower base and has a more compressed timeline.
The International Development Bank representative at TIIF 2026 described Uzbekistan as a potential hub for Islamic finance in Central Asia. That framing is correct as a direction of travel. As a current state of affairs, it overstates where things are.
What to Watch
The most consequential near-term signal is whether any commercial bank actually opens an Islamic window in 2026 — and if so, which one. A commercial bank with an Islamic window creates a distribution network for Islamic finance products that microfinance organizations cannot replicate. It also creates a reference case that the rest of the banking sector can follow or ignore.
The second signal is what the Council actually produces. Unified standards that align with AAOIFI global norms would position Uzbek Islamic finance to connect with the international capital market ecosystem. Standards that diverge or are vague would slow everything down. The council’s first year is the one that sets the trajectory.
Uzbekistan has the demographic depth, the regulatory intent, and now the legal foundation. What it does not yet have is a working market. The gap between those two things is the story of the next three years.