Economic Reporter :
Policy support and increasing popularity are encouraging a fast expansion of the Islamic banking sector in the country.
Many conventional banks, lured by a possibility of good business, have been opening up separate windows for Islamic finance or turning completely into Shariah-compliant banks, according to a Bangladesh Bank report published on Thursday.
Standard Bank and NRB Global Bank have started functioning as Islamic banks since 1 January, says the report on the development of Islamic finance in Bangladesh. Apart from the two, Mercantile Bank, Midland Bank, and NRB Commercial Bank opened separate windows to provide services of Islamic finance.
Islamic finance has grown with the help of “positive initiatives undertaken by different countries as well as its growing demand across the globe,” the report says,
It accounted for almost one-fourth of the entire banking system in terms of deposits and investments at the end of the third quarter of 2020.
At present, the country has 8 fully fledged Islamic banks. Nine other banks have branches and 12 have windows dedicated to Islamic finance.
Having seen the rising demand for Islamic finance, the government also introduced an Islamic bond called Sukuk.
Such bonds will play a role in managing the liquidity of Islamic banks, as well as in helping the government implement the budgets and developing Sharia-based capital markets.
The report highlights the status of Islamic banks in terms of deposits, lending (investment), remittance and excess liquidity during the third quarter of 2020.
At the end of the period, deposits and investments (credit) grew by 9.72% and 3.10% respectively, while remittance and excess liquidity climbed by 73.92% and 95.51% compared to the previous quarter.
However, deposits were 22% up from the same period of 2019 while loan disbursements 10% and the remittance growth more than 51%.
Of all the banks compliant with shariah, Islami Bank Bangladesh Ltd collected the highest amount in deposits — 34.25%– and disbursed the highest amount in loans – 33.65%– from June through September last year.
Policy support and increasing popularity are encouraging a fast expansion of the Islamic banking sector in the country.
Many conventional banks, lured by a possibility of good business, have been opening up separate windows for Islamic finance or turning completely into Shariah-compliant banks, according to a Bangladesh Bank report published on Thursday.
Standard Bank and NRB Global Bank have started functioning as Islamic banks since 1 January, says the report on the development of Islamic finance in Bangladesh. Apart from the two, Mercantile Bank, Midland Bank, and NRB Commercial Bank opened separate windows to provide services of Islamic finance.
Islamic finance has grown with the help of “positive initiatives undertaken by different countries as well as its growing demand across the globe,” the report says,
It accounted for almost one-fourth of the entire banking system in terms of deposits and investments at the end of the third quarter of 2020.
At present, the country has 8 fully fledged Islamic banks. Nine other banks have branches and 12 have windows dedicated to Islamic finance.
Having seen the rising demand for Islamic finance, the government also introduced an Islamic bond called Sukuk.
Such bonds will play a role in managing the liquidity of Islamic banks, as well as in helping the government implement the budgets and developing Sharia-based capital markets.
The report highlights the status of Islamic banks in terms of deposits, lending (investment), remittance and excess liquidity during the third quarter of 2020.
At the end of the period, deposits and investments (credit) grew by 9.72% and 3.10% respectively, while remittance and excess liquidity climbed by 73.92% and 95.51% compared to the previous quarter.
However, deposits were 22% up from the same period of 2019 while loan disbursements 10% and the remittance growth more than 51%.
Of all the banks compliant with shariah, Islami Bank Bangladesh Ltd collected the highest amount in deposits — 34.25%– and disbursed the highest amount in loans – 33.65%– from June through September last year.
