In this article, we will talk about the achievements, impacts and Islamic Banking in Bangladesh.
Bangladesh is one of the world’s largest Muslim countries, with a population dedicated to the Islamic way of life as in the Holy Qur’an and Sunnah. Naturally, fashioning and designing their economic life in accordance with Islamic principles remains a deep cry in their hearts. With these goals in mind, Bangladesh signed the charter of the Islamic Development Bank in August 1974.
Bangladesh Bank, the country’s central bank, has sent a delegation to observe the functioning procedures of numerous Islamic banks overseas in November 1980.
A group from the Islamic Development Bank (IDB) visited Bangladesh in November 1982. They expressed strong interest in forming a joint venture Islamic bank in the private sector. The group discovered that there were a lot of accomplishments. So, they decided that Islamic banking was ready to launch right away. Firstly, they provided training to top bankers and economists to fill the leadership gap for future Islamic banks in Bangladesh. In addition, to organize public opinion in favor of Islamic banking, they held seminars, symposia, and workshops on Islamic economics and banking across the country.
When the necessary preparatory work finished, Islamic banking in Bangladesh was introduced in 1983 with the establishment of Islami Bank Bangladesh Limited on March 30, 1983.
The Role of Bangladesh Central Bank
The Central Bank, without a doubt, has played a significant role in the development of Islamic banking in Bangladesh. The bank added several clauses to the Banking Company Act when the Islamic Bank Bangladesh Limited was granted a license to conduct banking activity according to shariah. Moreover, they amended the country’s Income Tax Law. Bangladesh Bank also hosts many seminars and symposia on Islamic banking. They included the issues related to Islamic banking in the training courses in its academy. The Bangladesh Bank at Dhaka also organized an International Seminar on the development of Islamic financial instruments.
Aggregate deposits of the Islamic banks is around Taka 30,600 million. It is 5.40% of the total deposits of the banking system in Bangladesh. At the end of 1998, Islamic banks’ investment share of overall banking system investments (loans and advances) was Taka 26,480 million, or 5.61%. In addition, Islamic banks’ deposits, investments, and business have grown at a higher rate than conventional banks’.
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