With steady growth, the Islamic banking sector has been playing a significant role in mobilising deposits and financing various economic activities in Bangladesh since its inception around 1983.
Among different segments of Islamic finance in Bangladesh, Islamic banking dominates with around 26 per cent share in deposit and investment of the total banking sector, according to a report of the Bangladesh Bank titled “Development of Islamic banking in Bangladesh October-December 2022”.
Data analysis from 2011 to 2022 shows the total amount of deposits saw over fivefold increase during this period. Due to high demand, the number of Islamic banks is rising though there is a rush from conventional banks to open separate Islamic banking branches and windows as well.
In 2011, the total deposit of Islamic banks was Tk 74,029 crore, which was 16.63 per cent of the total deposit in the banking sector. It increased to Tk 4,09,949 crore in December 2022, and the share was 25.81 per cent of the total bank deposit.
Islami Bank Bangladesh Limited (IBBL) is the first Shariah-based bank in Bangladesh that is a big player in this sector. Among all Islamic banks, IBBL accounts for the highest share of deposits, which was 34.45 per cent at the end of 2022. The deposit of 10 full-fledged Islamic banks stood at Tk 3,79,951 crore, windows of conventional banks at Tk 16,116 crore, and branches of conventional banks at Tk 13,883 crore at the end of December 2022.
Deposit share
Till December 2022, among all Islamic banks, IBBL accounted for the highest share of deposits (34.45 per cent), followed by First Security Islami Bank (11.54 per cent), EXIM Bank (10.42 per cent), Al-Arafah Islami Bank (10.25 per cent), Social Islami Bank (7.80 per cent), Shahjalal Islami Bank (5.56 per cent), Union Bank (5.20 per cent), Standard Bank (4.17 per cent), Global Islami Bank (3 per cent), Islamic banking windows of conventional banks (3.93 per cent), Islamic banking branches of conventional banks (3.39 per cent), and ICB Islamic Bank (0.3 per cent).
