Uzbekistan Builds a Legal Framework for Islamic Finance
Economy
Uzbekistan is developing the legal and institutional framework for Islamic finance, with 12 microfinance institutions already offering Islamic financial services. The next stage is expected to focus on developing the Islamic capital market, Central Bank Chairman Timur Ishmetov said at the Silk Road Finance & Technology Forum.
According to Ishmetov, microfinance institutions in Uzbekistan currently use murabaha, ijara, salam, mudaraba and musharaka contracts. One microfinance institution specialises entirely in financing and supporting women entrepreneurs, using mudaraba, a profit-sharing arrangement based on participation in profits.
Ishmetov said the development of Islamic finance in Uzbekistan is proceeding in three stages. The first involved the adoption of legislation and regulations allowing microfinance institutions to offer Islamic finance products.
The second stage began following the adoption on June 29 of a law on Islamic banking activities, which established the legal basis for developing Islamic banking in the country.
The third stage focuses on developing the Islamic capital market. A draft new capital markets law includes a separate chapter on sukuk. The bill has already passed its first reading in the Legislative Chamber and establishes a legal framework for issuing sovereign and corporate sukuk.
“The draft law also defines requirements for compliance with Islamic finance standards, the legal status of special-purpose legal entities for sukuk and a mechanism for protecting sukuk assets,” Ishmetov said.
The development of Islamic finance in Uzbekistan comes amid continued global market expansion. Ghiath Shabsigh, Secretary General of the Islamic Financial Services Board, said the global Islamic finance market reached $4.2 trillion by the end of last year.
He forecast that over the next decade Islamic finance will become systemically significant in most countries across the Middle East and North Africa, as well as a substantial part of South and Southeast Asia.
Ishmetov said the development of Islamic finance in Uzbekistan is proceeding in three stages. The first involved the adoption of legislation and regulations allowing microfinance institutions to offer Islamic finance products.
The second stage began following the adoption on June 29 of a law on Islamic banking activities, which established the legal basis for developing Islamic banking in the country.
The third stage focuses on developing the Islamic capital market. A draft new capital markets law includes a separate chapter on sukuk. The bill has already passed its first reading in the Legislative Chamber and establishes a legal framework for issuing sovereign and corporate sukuk.
“The draft law also defines requirements for compliance with Islamic finance standards, the legal status of special-purpose legal entities for sukuk and a mechanism for protecting sukuk assets,” Ishmetov said.
The development of Islamic finance in Uzbekistan comes amid continued global market expansion. Ghiath Shabsigh, Secretary General of the Islamic Financial Services Board, said the global Islamic finance market reached $4.2 trillion by the end of last year.
He forecast that over the next decade Islamic finance will become systemically significant in most countries across the Middle East and North Africa, as well as a substantial part of South and Southeast Asia.
Powered by Froala Editor