Md. Saifullah Azad, CERM :
Islamic finance in Bangladesh has undergone a journey that is marked with various significant milestones. Major achievements of the industry in term of its development since inception may be highlighted here. Islamic finance in Bangladesh has become a key segment in the financial system. A novelty of the journey has transformed into a mainstream financial system now. This is a consequence of continuous initiatives to build a solid foundation, focusing on infrastructural, institutional and capacity building measures. However, adequate regulatory and supervisory framework though solid legal framework still required for further acceleration and streamlining of Islamic finance in Bangladesh. These measures are the cornerstones of growth of Islamic finance industry in Bangladesh.
Only one Islamic bank started its humble journey in 1983 and there are now 8 full-fledged banks, 23 conventional banks operating partial Islamic banking offer over 100 financial products beyond the basic financial offerings. The industry is characterized by increasing competitiveness and innovation. Islamic banking assets have also grown remarkably in Bangladesh contributing significantly to the development of the real economy of Bangladesh.
Augmented integration with the global market has enabled greater trade and financial linkages. Bangladesh is now positioned at the forefront of international developments with increasing connectivity between financial centers, and more cross-border Islamic financial transactions. These interlinkages will open up greater opportunities to introduce and strategically position Islamic finance services globally while providing opportunities for meaningful participation of our local players as lead arrangers for some of the global sukuk issuances. The gains will also be extended to our ancillary service providers that will able to establish greater connections with the international market.
The future growth of Islamic finance, especially cross border, is very much dependent on the harmonization and mutual recognition of legal views and rulings across the globe. In the context of the legal Standards, the dynamic process of its development involves the act of harmonizing the differences and embracing diversity. This broadens the reference scope for scholars to have an enriching debate on the best application of law in contemporary finance, based on the customs, legal and operational framework of each market. The act of balancing the authenticity and practicality of the different legal interpretations is an important component in seeking a solution for the benefits and welfare of the mankind.
Continuous enhancements of curriculums in universities are critical to increase the employability factor of graduates. These include reconfiguration of the academic programs at universities and enhancements to the learning tools and methods of teaching.
Acceptance of experiential learning opens the window of opportunity for learners to go beyond theory-based teaching. Examples include industry-wide internship, real life problem solving assignments and apprenticeship programs for them. These methods create greater connection between classroom learning with the real world. Experiential learning is a strong stimulant to knowledge acquisition that encourages learners to develop their skills while experiencing responsible decision making in real-time. Experience in real life situations differentiates experiential learning from cognitive and behavioral learning. This provides the learners with a competitive edge and increases the probability of success for graduates at entry-level into the workforce. Bangladesh, with its long history that includes the development of Islamic finance over three decades is content rich and ideal for case study research. There are many matters and areas that require in-depth research and solutions. The case study method is another popular learning tool that has proven to be effective in enhancing and strengthening critical appraisal and understanding among learners. The case study method also provides an opportunity to discuss multiple perspectives in dealing with issues.
In essence, practitioners and professionals need to be more exploratory and brave to rigorously investigate or examine real life situations and complex scenarios and benefit from hindsight and learnt lessons that can give new solutions for future growth. We need to encourage universities to move towards experiential learning. Learners will be exposed to legal and operational requirements covering areas such as product structuring, legal, accounting as well as risk management. The transparent nature of the standards would enable learners to critique and form their own views and conclusions. It will be a leap forward to change the paradigm on the theoretical and operational aspects of legal applications. Thus, those initiative is certainly a game-changer for Islamic finance education programs in Bangladesh. Those initiatives will also be important milestones in terms of academia-industry cooperation in equipping the learners with industry relevant and contemporary application of legal contracts in Islamic financial products and services. Given the new content on the subject matter, a pre-condition to successfully implement the learning guide is to train and expose lecturers to multiple disciplines of subject matters. Particularly, as the applications of the legal and operational requirements cover various fields that include legal, accounting, risk management and information technology. Developmental training is a critical component as it enables the imparting of knowledge effectively.
The role of learning institutions is essential to develop talent with higher skill sets, the industry also has an important role to ensure effective deployment of graduates as they enter the workforce. The number of graduates is indeed increasing at a rapid rate. The general feedback of scholars however is the lack of opportunities for employment. But the reality is that the industry still grapples with shortage of the right talent that can lead and energize innovation. A solution can be to reconcile the expectation gaps of the industry and graduates. Talent enrichment program is one area where we can pursue to bring out the best of student talent. Enrichment programs in areas beyond law, such as leadership training at the early stage of recruitment would strengthen the confidence of learners and provide the required exposure for them to understand and appreciate the intricacies of business environment.
There is a need of specialized institutions in Bangladesh for Islamic finance and banking contributing towards sustainable developments for professionals and expertise in the sector. The Islamic finance and banking sector as a whole should be significantly benefitted from the contribution of these institutions. Some professional institutes are accommodating the needs of Islamic banking and finance but these are not adequate. Henceforth, the establishment of a chartered institute e.g. CISI UK is a must for creating Islamic finance professionals to promote the highest standards of professional practice amongst Islamic finance practitioners. Many countries such as UK, Malaysia, and Bahrain are far ahead in promoting Islamic finance literacy and development. They have huge investment in Research and Development (R&D) to move fast forward of asset-based/asset-based banking practices. Some well reputed universities in the world are promoting graduation, post-graduation and doctoral degree in Islamic economic, finance and banking which further enrich their banking system. Over the years, specialized institutions have been established in Malaysia to enrich the talent ecosystem in Islamic finance.
These institutions, namely INCEIF, ISRA, IBFIM and the Chartered Institute of Islamic Finance Professionals (CIIF) have collectively contributed towards sustainable development of professionals and expertise in the Islamic banking industry.
Finally, broader collaboration between the academic fraternity and the industry players is a must. They must work together to develop a finest mechanism that will make the overall learning experience more comprehensive, exciting and interactive. They may review the strategic aspects to re-energize and reinvent the Islamic finance talent development. Thus, the coordinated efforts will determine the path of Islamic finance moving forward for the enriched capacity of the sector.
Islamic finance in Bangladesh has undergone a journey that is marked with various significant milestones. Major achievements of the industry in term of its development since inception may be highlighted here. Islamic finance in Bangladesh has become a key segment in the financial system. A novelty of the journey has transformed into a mainstream financial system now. This is a consequence of continuous initiatives to build a solid foundation, focusing on infrastructural, institutional and capacity building measures. However, adequate regulatory and supervisory framework though solid legal framework still required for further acceleration and streamlining of Islamic finance in Bangladesh. These measures are the cornerstones of growth of Islamic finance industry in Bangladesh.
Only one Islamic bank started its humble journey in 1983 and there are now 8 full-fledged banks, 23 conventional banks operating partial Islamic banking offer over 100 financial products beyond the basic financial offerings. The industry is characterized by increasing competitiveness and innovation. Islamic banking assets have also grown remarkably in Bangladesh contributing significantly to the development of the real economy of Bangladesh.
Augmented integration with the global market has enabled greater trade and financial linkages. Bangladesh is now positioned at the forefront of international developments with increasing connectivity between financial centers, and more cross-border Islamic financial transactions. These interlinkages will open up greater opportunities to introduce and strategically position Islamic finance services globally while providing opportunities for meaningful participation of our local players as lead arrangers for some of the global sukuk issuances. The gains will also be extended to our ancillary service providers that will able to establish greater connections with the international market.
The future growth of Islamic finance, especially cross border, is very much dependent on the harmonization and mutual recognition of legal views and rulings across the globe. In the context of the legal Standards, the dynamic process of its development involves the act of harmonizing the differences and embracing diversity. This broadens the reference scope for scholars to have an enriching debate on the best application of law in contemporary finance, based on the customs, legal and operational framework of each market. The act of balancing the authenticity and practicality of the different legal interpretations is an important component in seeking a solution for the benefits and welfare of the mankind.
Continuous enhancements of curriculums in universities are critical to increase the employability factor of graduates. These include reconfiguration of the academic programs at universities and enhancements to the learning tools and methods of teaching.
Acceptance of experiential learning opens the window of opportunity for learners to go beyond theory-based teaching. Examples include industry-wide internship, real life problem solving assignments and apprenticeship programs for them. These methods create greater connection between classroom learning with the real world. Experiential learning is a strong stimulant to knowledge acquisition that encourages learners to develop their skills while experiencing responsible decision making in real-time. Experience in real life situations differentiates experiential learning from cognitive and behavioral learning. This provides the learners with a competitive edge and increases the probability of success for graduates at entry-level into the workforce. Bangladesh, with its long history that includes the development of Islamic finance over three decades is content rich and ideal for case study research. There are many matters and areas that require in-depth research and solutions. The case study method is another popular learning tool that has proven to be effective in enhancing and strengthening critical appraisal and understanding among learners. The case study method also provides an opportunity to discuss multiple perspectives in dealing with issues.
In essence, practitioners and professionals need to be more exploratory and brave to rigorously investigate or examine real life situations and complex scenarios and benefit from hindsight and learnt lessons that can give new solutions for future growth. We need to encourage universities to move towards experiential learning. Learners will be exposed to legal and operational requirements covering areas such as product structuring, legal, accounting as well as risk management. The transparent nature of the standards would enable learners to critique and form their own views and conclusions. It will be a leap forward to change the paradigm on the theoretical and operational aspects of legal applications. Thus, those initiative is certainly a game-changer for Islamic finance education programs in Bangladesh. Those initiatives will also be important milestones in terms of academia-industry cooperation in equipping the learners with industry relevant and contemporary application of legal contracts in Islamic financial products and services. Given the new content on the subject matter, a pre-condition to successfully implement the learning guide is to train and expose lecturers to multiple disciplines of subject matters. Particularly, as the applications of the legal and operational requirements cover various fields that include legal, accounting, risk management and information technology. Developmental training is a critical component as it enables the imparting of knowledge effectively.
The role of learning institutions is essential to develop talent with higher skill sets, the industry also has an important role to ensure effective deployment of graduates as they enter the workforce. The number of graduates is indeed increasing at a rapid rate. The general feedback of scholars however is the lack of opportunities for employment. But the reality is that the industry still grapples with shortage of the right talent that can lead and energize innovation. A solution can be to reconcile the expectation gaps of the industry and graduates. Talent enrichment program is one area where we can pursue to bring out the best of student talent. Enrichment programs in areas beyond law, such as leadership training at the early stage of recruitment would strengthen the confidence of learners and provide the required exposure for them to understand and appreciate the intricacies of business environment.
There is a need of specialized institutions in Bangladesh for Islamic finance and banking contributing towards sustainable developments for professionals and expertise in the sector. The Islamic finance and banking sector as a whole should be significantly benefitted from the contribution of these institutions. Some professional institutes are accommodating the needs of Islamic banking and finance but these are not adequate. Henceforth, the establishment of a chartered institute e.g. CISI UK is a must for creating Islamic finance professionals to promote the highest standards of professional practice amongst Islamic finance practitioners. Many countries such as UK, Malaysia, and Bahrain are far ahead in promoting Islamic finance literacy and development. They have huge investment in Research and Development (R&D) to move fast forward of asset-based/asset-based banking practices. Some well reputed universities in the world are promoting graduation, post-graduation and doctoral degree in Islamic economic, finance and banking which further enrich their banking system. Over the years, specialized institutions have been established in Malaysia to enrich the talent ecosystem in Islamic finance.
These institutions, namely INCEIF, ISRA, IBFIM and the Chartered Institute of Islamic Finance Professionals (CIIF) have collectively contributed towards sustainable development of professionals and expertise in the Islamic banking industry.
Finally, broader collaboration between the academic fraternity and the industry players is a must. They must work together to develop a finest mechanism that will make the overall learning experience more comprehensive, exciting and interactive. They may review the strategic aspects to re-energize and reinvent the Islamic finance talent development. Thus, the coordinated efforts will determine the path of Islamic finance moving forward for the enriched capacity of the sector.
The writer, a banker by profession is a Certified Expert in Risk Management (CERM) from Frankfurt School of Finance, Germany. The views expressed in the article are the writer’s own and not necessarily the organization he represents. Email: [email protected]
