INSTITUTIONAL MECHANISMS FOR THE DEVELOPMENT OF THE ISLAMIC BANKING SYSTEM IN UZBEKISTAN AND DIRECTIONS FOR ENSURING FINANCIAL STABILITY

This article comprehensively examines the institutional mechanisms for the establishment and development of the Islamic banking system in Uzbekistan, the possibilities for its integration into the national financial system, and its role in ensuring financial stability. The study investigates the theoretical and economic foundations of Islamic banking, regulatory models developed through international experience, Shariah-compliant financing instruments, prudential supervision mechanisms, and the development characteristics of institutional infrastructure. Furthermore, the legal, economic, organizational, and technological factors influencing the introduction of Islamic financial services into Uzbekistan’s banking system are systematically examined. The research conducts a comparative analysis of Islamic banking regulatory practices in Malaysia, Bahrain, Indonesia, and other countries and proposes an institutional governance model adapted to Uzbekistan’s national conditions. A conceptual approach is developed to assess financial stability by integrating capital adequacy, liquidity, asset quality, profitability, risk diversification, and Shariah compliance indicators. Based on the research findings, scientific and practical recommendations are proposed for the gradual development of Islamic banking in Uzbekistan, strengthening the legal foundations of a dual banking system, establishing specialized liquidity management instruments, enhancing institutional supervision, and expanding financial inclusion.