Deposits in Islamic banking sector up 12% in FY22

Total deposits in the country’s Shariah-based banks or Islamic banking sector increased by 12 per cent to Tk 4,12,341 crore in the fiscal 2021-2022.

The figure accounts for 26.19 per cent of the total deposits in the entire banking sector and was Tk 3,68,163 crore in the previous fiscal year, according to the latest report from Bangladesh Bank.

Total investment (loans & advances) of Islamic banking sector stood at Tk 3,81,829 crore in FY22, up 16.43 per cent from the same period a year ago.

The share of total investment of Islamic banking sector made up 28.52 per cent of entire loans & advances of the whole banking sector, which was 27.55 per cent during the period.

Conventional banks are now showing interest in the Islamic banking, as they opened many Shariah-based branches during the last two financial years.

The number of such branches reached at 2,207 in FY2022, which was 1,802 in FY21, according to the BB data.

During the period, total remittances sent through the Islamic banking system stood at Tk 15,717 crore, down 21.57 per cent from the same period a year back. The Islamic banking sector made up 31.57 per cent of the total inward remittances during the period.

Surplus liquidity of Islamic banking sector was Tk 26,009 crore in FY22, down 28.48 per cent from the same period of the last year, the report said.

Entire banking sector has been facing a liquidity crisis, which was reflected in the Islamic banking segments, said people familiar with the situation.

The country has 10 full-fledged Islamic banks with 1,682 branches, nine conventional banks with 45 Islamic banking branches and 14 conventional banks with 480 Islamic banking windows as of FY2022.

The number of total employment in the Islamic banking sector was 48,728 in FY22, up from 43,909 in FY21.

Islamic banking system has significant contributions towards the growth and economic development of Bangladesh. It experienced phenomenal growth and continued to expand in the country as the deposits and investments increased significantly over the time, the report said.