Acumen:
International Journal of
Multidisciplinary Research
ISSN: 3060-4745
IF(Impact Factor)10.41 / 2024
Volume 2, Issue 1
74
Acumen: International Journal of Multidisciplinary Research
ISSUES OF INTRODUCING ISLAMIC FINANCE SERVICES IN
UZBEKISTAN
teacher Sa’dullayeva Gulnoza Usmanovna
Jumayev Javohir Shavkat o‘g‘li
Abstract
This article analyzes the issues of introducing Islamic finance in the Republic of
Uzbekistan. It highlights the need to diversify the country's financial system, the basic
principles of Islamic finance and its advantages. It also discusses the main obstacles
to the development of Islamic finance, including the lack of a legal and regulatory
framework, the shortage of qualified specialists, and the population's insufficient
awareness of Islamic finance. The author also provides recommendations on the
infrastructure and products necessary for the development of Islamic finance. This
article serves as an in-depth study of the opportunities and limitations of Islamic
finance in the conditions of Uzbekistan.
Keywords: Islamic finance, Islamic banking, Islamic economics, usury, Islamic
jurisprudence, mudarabah, murabahah, musharaka.
Any state or organization functions only if there are laws that regulate it. The set
of laws and regulations that regulate the way of life of Muslims is Sharia. Sharia is a
1500-year-old spiritual, moral, legal and economic system. Islamic finance is an
economic system based on these Sharia laws and regulations. The principles of Islamic
finance were first used by the Arabs in the Arabian Peninsula in 622-661. Even the
Prophet Muhammad (PBUH) traded using these principles before the revelation. At
that time, riba [i.e., interest-based financial relations] was very widespread. Then Allah
forbade riba, and after the revelation, Muhammad (PBUH) was the first to prohibit this
relationship.
Later, Islamic finance went through several stages and reached the present day.
These laws have 4 sources: 1. The Holy Quran, which is considered the original and
unchangeable source of religious knowledge. The Quran contains the revelations of
Allah, conveyed through the angel Gabriel to the Prophet Muhammad S. A. W., and is
a divine guidance for all humanity. 2. Hadith. A narration that describes the people of
the Prophet Muhammad S. A. W. or the realities related to them, and forms the basis of
the Sunnah of Muhammad S. A. W. 3. Ijma is a solution developed by reputable Islamic
scholars for a specific issue or situation. In Islamic tradition, a person who has the right
to draw conclusions independently of the Quran and Sunnah is called a “Mujtahid”. 4.
Qiyas - the original meaning of this term is derived from the words measuring or
Acumen:
International Journal of
Multidisciplinary Research
ISSN: 3060-4745
IF(Impact Factor)10.41 / 2024
Volume 2, Issue 1
75
Acumen: International Journal of Multidisciplinary Research
comparing two things, Qiyas is the development of new solutions and rulings by
mujtahids on complex and complex issues, based on the principles set forth in the
Quran and hadiths.
There are several transactions in Islamic finance, the main ones being: The first
transaction is “sarf”. Sarf refers to the exchange of products with material value
between the parties, such as dinars (gold), dirhams (silver) or their minted, ingot or
other forms, and currently circulating monetary units (currencies). The second
transaction is “murabaha”. Murabaha is a contract in which a seller or financial
institution sells a product (such as equipment) to a buyer who has placed an order, with
a certain margin agreed upon with the buyer, and then sells it to the buyer on the
condition that it is paid in installments over a certain period of time.
The third transaction is “mudaraba”. Mudaraba is a type of partnership agreement,
in which the investor (rabb-ul-mal) allocates capital to conduct business activities in
partnership with the manager (mudarib). In such a partnership, the business activity is
fully managed by the mudarib. The profits made during the activity are divided in a
pre-agreed ratio, and the losses are borne solely by the investor. The fourth transaction
is “salam”. Salam is a transaction in which payment for the product is made
immediately, and the product is delivered to the buyer later (in this case, the product
being sold may or may not exist at the time of the transaction).
The salam contract is more commonly used in agriculture. The fifth agreement is
an “exception”. An exception, like salam, is a contract for the sale of a product that has
not yet been produced. This contract provides that the manufacturer will manufacture
the ordered product from its own raw materials. In order for this agreement to be legally
binding, the price, quality and characteristics of the product to be produced must be
clearly agreed upon between the parties. The sixth agreement is “musharaka” which is
a property partnership between two or more parties, in which each partner invests a
certain amount of money or property in a common business, and the profits made
within the framework of this business are distributed, based on the agreement of the
parties, in proportion to the share of each partner in the total investment. The difference
between Islamic banks and conventional banks is that in Islamic banks:
1. In the event of a profit or loss, the contract specifies how many shares will be
divided between the investor and the entrepreneur.
2. Interest ( riba ) is strictly prohibited. Instead, a share of the income is received,
and if the entrepreneur does not make a profit, but a loss, it is divided between the bank
and the entrepreneur in shares in accordance with the terms of the contract.
3. The entrepreneur does not pay additional interest ( fine ) for each day that the
loan is overdue.
Acumen:
International Journal of
Multidisciplinary Research
ISSN: 3060-4745
IF(Impact Factor)10.41 / 2024
Volume 2, Issue 1
76
Acumen: International Journal of Multidisciplinary Research
4. It does not guarantee that the money deposited will be returned with interest
within a certain period.
This depends on the bank's income. In traditional banks:
1. The investor can calculate in advance how much interest he will get back the
money he deposited in the bank.
2. Lending money and getting it back with interest is one of the main activities of
a commercial bank. Whether the entrepreneur's business is successful or goes bankrupt,
he must return the loan to the bank in full with interest.
3. The entrepreneur takes a loan. pays additional interest (penalty) for each day
that passes the due date.
4. Guarantees the withdrawal of the deposited money with interest within a certain
period.
The first Islamic bank was founded in Egypt in 1963. According to Reuters, today
more than 300 Islamic banks and more than 200 Islamic branches operate in 67
countries around the world. The total capital of Islamic banks has exceeded 2 trillion
US dollars. Islamic banks are most developed in Saudi Arabia, Iraq, Kuwait, Malaysia,
UAE, Pakistan, Bangladesh, Turkey. In addition, they operate in Germany, the USA,
Canada, Great Britain, France, Italy, Ireland, Luxembourg and other countries. More
than 130 universities around the world are training personnel in Islamic banking and
finance. In particular, special courses have been organized in the following most
famous universities in the world. Students study at the bachelor's, master's, and doctoral
levels.
The first Islamic bank in Central Asia, “Al-Hilol”, was the first in Kazakhstan to
receive a license to conduct banking operations in March 2010. On August 17, 2017,
“Zamanbank” received a license to provide Islamic services and began its activities. In
April 2009, Kyrgyzstan adopted amendments and additions to the Law of the Kyrgyz
Republic “On Banks and Banking Activities”, etc. These amendments created
opportunities for the use of Islamic methods of financing in traditional banks with
Islamic and “Islamic windows”.
One of the biggest prohibitions in Islamic finance is usury. That is, “usury” is one
of the most basic prohibitions in Islamic finance, and in Islamic jurisprudence it is one
of the biggest sins. "Riba an-nasiyah" is the process of obtaining profit by charging an
additional value for a delayed period in the process of exchange based on a debt
relationship. The practice of interest-based lending by religious banks is riba annasiyah
itself, in which the borrower also pays money (interest) under the loan agreement. What
is the wisdom behind the prohibition of riba? The Kuwaiti Encyclopedia of Fiqh
provides the following considerations in response to this question. The commentators
Acumen:
International Journal of
Multidisciplinary Research
ISSN: 3060-4745
IF(Impact Factor)10.41 / 2024
Volume 2, Issue 1
77
Acumen: International Journal of Multidisciplinary Research
have given several Sharia reasons for the prohibition of riba: First, "riba" requires that
a person acquires the property of another person without compensation. Because if
someone sells (exchanges) one sum for two sums, he is acquiring an extra sum without
any compensation, whether it is cash or loan. The property of a Muslim depends on his
needs and his property is considered inviolable. There are hadiths of our Prophet
Muhammad (peace be upon him) that say, “The honor of a Muslim’s wealth is like the
honor of his blood” (i.e., just as it is forbidden to violate his blood, it is also forbidden
to violate his wealth). Any loan that brings profit is riba. When lending, the intention
is to help people and make their lives easier. Our Shariah has discouraged using debt
as a source of profit. Therefore, the lender has the right to receive only the exact amount
of the loan he gave. If a loan is conditional on a profit or not, if it is customary to add
something to it, or if someone has a habit of taking a loan and adding profit to it, the
profit received is haram. First, there is a serious flaw in the banking credit system.
In Islamic economics, the more efficient and rational mechanism for allocating
resources, unlike the profit-interest rate, is also worthy of serious study, as it is a system
that counteracts many of the negative trends of the modern economy (monopoly, the
sharp difference between the rich and the poor, financial crises, etc.). A number of other
problems facing the field of Islamic finance can be listed, because "complexity and
problems" are inherent in any system. Understanding and recognizing problems is the
starting point for finding effective solutions. This will make the system itself and all its
"components" healthy. If the representatives of the field solve at least some of the
problems mentioned above, this would be a huge step in the development and rise of
the system.
REFERENCES
1. Ahmed, S. (1989), Islamic Banking and Finance, Journal of Monetary
Economics, Vol 24, pp. 157-167.
2. Blitz, R. and Long, M. (1965), The Economics of Usury Regulation. Journal of
Political Economy, Dec., pp. 608-619.
3. Akhmadjonov, A Abdullayev, A Abdupattayev, M Sultonov. (2021). ISLAMIC
BANKING MANAGEMENT, ASSETS AND LIBILITIES. Scientific progress, 2 (6),
1525-1532.
4. M Mamadjonov, A Abdullayev, I Abdurahmonov, A Mamadaliyev. (2021).
CHALLENGES OF MANAGEMENT IN THE DIGITAL ECONOMY. Scientific
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5. M.Tojiyeva, AAU Abdullayev. (2021). THE USE OF MODERN
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