The MPs of the Legislative Chamber, at the November 11 meeting passed the bill on Islamic banking, the press service of the lower house of parliament said.

After reviewing the bill in the first reading, MPs inserted more than 40 clarifying amendments and changes.

The part concerning the powers of the Central Bank to set the minimum size of the authorized capital of payment organizations and payment system operators has been removed from the bill – ​​this norm is already contained in another law.

According to the proposed amendments, banks will be allowed to provide finance clients based on Islamic financial standards, as well as to set up legal entities and purchase shares or stakes in their authorized capital.

The MP Khusan Yarkulov underscored that they had decided not to insert the terms mudarabah, wakala, murabaha, salam, and musharaka in the Banks and Banking Activities law. According to him, there are more than 30 such Islamic financial transactions, and only six were enumerated in the bill, and their definitions were not fully disclosed.

In his opinion, it is more appropriate to specify the definition of these terms in the regulations of the Central Bank.

Furthermore, the phrase independent body of the bank has been replaced with collegiate body – based on the essence of the council on Islamic finance as a collegiate management body. The word fatwas was also removed from the text, as it is not used in current legislation.

It should be noted that a draft presidential decree, put up for public input in May 2018, planned to create an infrastructure for Islamic banking and finance in Uzbekistan. The bill outlined the introduction of a ban on interest-based remuneration (ribah), the sharing of profits and losses with entrepreneurs proportionally to their shares in the project, and the development of regulatory acts for the implementation of insurance activities (takafful), leasing activities (ijarah), securities transactions (sukuk), and other operations based on the principles of Islamic finance.

This issue was discussed every year, including at meetings between the president and business leaders. The Uzbekistan-2030 strategy has set the goal to introduce the criteria and procedures of Islamic finance in at least three commercial banks and forming the regulatory framework for Islamic finance.