Today, nearly one-third of Bangladesh’s banking sector operates under Islamic banking principles, a testament to its widespread acceptance and influence. This popularity has even led conventional banks to integrate Shariah-compliant practices into their operations, with many establishing specialized branches and windows dedicated to Islamic banking activities.
Beyond Bangladesh’s borders, Islamic finance has emerged as a global financial sector, boasting assets such as various Islamic financing methods, Sukuk (Islamic bonds), Sharia-compliant mutual funds, and Takaful (Islamic insurance). This expansion is driven by principles of risk-sharing, financial inclusion, and transactions grounded in real assets. From the United States to India, Islamic banking institutions are making significant strides in diverse financial landscapes.
The global assets of Islamic banks have surpassed three trillion US dollars and continue to grow steadily. Similarly, the total assets of Islamic finance worldwide exceed four trillion US dollars, with projections indicating a rise to approximately six trillion by 2026. In Bangladesh, the Islamic banking system is aligning with this global trend, supported by the policy framework provided by Bangladesh Bank.
Islamic banking’s impact on Bangladesh’s economic landscape is profound. With a substantial increase in deposits and investments, Islamic banks have expanded their reach through branches and operations across the country. As of September 2023, there were 10 full-fledged Islamic banks operating through 1,671 branches, constituting 15 percent of the country’s entire banking sector.
Moreover, Islamic banking has facilitated economic development by promoting financial inclusion and providing services to marginalized communities. Its success has made it increasingly attractive and profitable for conventional banks to incorporate Islamic banking activities into their offerings.
The trust and belief in Islamic values among the people of Bangladesh are reflected in the robust growth of deposits in Islamic banks. In September 2023, total deposits in Islamic banking reached Tk 4319.89 billion, marking a significant increase from previous years.
Beyond financial transactions, Islamic banks in Bangladesh are actively engaged in corporate social responsibility (CSR) initiatives. These activities, funded through Zakat and other Shariah-compliant sources, encompass education, healthcare, support for the underprivileged, environmental conservation, and more. Islami Bank Bangladesh PLC, in particular, has demonstrated a commitment to CSR, with contributions to government relief funds, education, healthcare, and various welfare programs.
In 2023 alone, Islami Bank dedicated over Tk 100 crore to CSR activities, benefiting approximately two crore individuals and underscoring its role as a responsible corporate citizen. Through its unwavering adherence to Islamic principles and dedication to societal welfare, Islami Bank Bangladesh PLC sets a benchmark for ethical banking practices and social responsibility in Bangladesh’s financial landscape.
