Bangladesh's Islamic banking sector saw considerable growth in investments in October 2025, signalling steady expansion in Shariah-compliant banking activities.
The Bangladesh Bank (BB) data shows investments rose from Tk 5.18 trillion in October 2024 to Tk 5.77 trillion in October 2025, reflecting an 11.27 per cent increase.
The Islamic banking system recorded a moderate increase in deposits, growing from Tk 4.33 trillion in October 2024 to Tk 4.67 trillion in October 2025, marking a 7.97 per cent growth.
The total banking system deposits increased from Tk 18.74 trillion in October 2024 to Tk 20.71 trillion in October 2025, reflecting a 10.49 per cent growth.
Islamic banks recorded their total assets increasing from Tk 8.55 trillion in October 2024 to Tk 9.64 trillion in October 2025, marking a robust growth of nearly 12.81 per cent.
Between November 2023 and October 2025, Islamic banks maintained almost steady growth in receiving export proceeds and observed very small fluctuations over time.
In October 2024, export receipts were $779 million.
The central bank data shows in October 2025, Islamic banks faced negative growth of around 3.10 per cent in receiving export proceeds, with the amount standing at $755 million.
In the same month, Islamic banks made around 19.79 per cent of total import payments.
Their import payments decreased from $1.13 billion in October 2024 to $1.04 billion in October 2025, reflecting an 8.67 per cent decline.
Islamic banks saw their remittance share increase from around 24.40 per cent in October 2024 to around 26.93 per cent in October 2025.
In this period, Islamic banks faced robust remittance growth, starting from $584 million in October 2024 and rising to $690 million at the end of October 2025.
The reason behind this could be expatriates regaining confidence in Islamic banks due to their improved management in recent times, according to the central bank report.
In October 2024, Islamic banks accounted for 53.23 per cent of the total deposits in the agent banking arena, with the figure standing at Tk 212 billion.
This rose to about Tk 252 billion in October 2025, recording an 18.90 per cent growth.
Experts say the rise in Islamic banks' investments reflects sustained demand for Shariah-compliant financing, particularly from small and medium enterprises and trade-related businesses, despite tighter liquidity conditions in the overall banking system.
They note that the growth in deposits, assets, and remittance inflows suggests improved confidence among clients, although the decline in export proceeds and import payments points to continued external sector pressures.
Dr Masrur Reaz, chairman of Policy Exchange Bangladesh, says the double-digit investment growth indicates renewed confidence in Islamic banks, supported by improvements in management, governance, and compliance.
He says the increase in remittance inflows through Islamic banks also reflects stronger trust among expatriates, while the fall in export proceeds underscores the need for better trade facilitation and foreign exchange management.
Sustaining the sector's growth will require stronger risk management, improved asset quality, and closer regulatory supervision to prevent future stress, Dr Reaz adds.
sajibur@gmail.com
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