BB raises SLR for Islamic banks to 10.50pc
Tuesday, 18 May 2010
FE Report
The central bank has increased the statutory liquidity ratio (SLR) for Islamic banks to 10.50 per cent to curb inflationary pressures on the economy.
Under the new rules, the banks will have to maintain 10.50 per cent SLR instead of the previous 10.00 per cent from their total demand and time liabilities.
"The new SLR rules for the Islamic banks have already come into effect from Sunday," a senior official of the Bangladesh Bank (BB) told the FE.
The Islami banks maintain only 10.50 per cent SLR instead of the existing 18.50 for the conventional scheduled banks. Because, the Islami banks cannot purchase treasury bills and bonds that involve receipt of interest, as the Shariah rules ban payment or receipt of interest by any individual or institution.
Currently, seven private commercial banks (PCBs) out of 30 are operating under the Islamic Shariah rules, the BB officials said, adding that the banks have their own Shariah Councils to dictate terms of banking under the Islamic rules and regulations.
The banks are Islami Bank Bangladesh Ltd, Al-Arafah Islami Bank Ltd, ICB Islamic Bank Ltd, Export Import Bank of Bangladesh Ltd (EXIM), Social Islami Bank Ltd, Shahjalal Islami Bank Ltd and First Security Islami Bank Ltd.
The central bank has increased the statutory liquidity ratio (SLR) for Islamic banks to 10.50 per cent to curb inflationary pressures on the economy.
Under the new rules, the banks will have to maintain 10.50 per cent SLR instead of the previous 10.00 per cent from their total demand and time liabilities.
"The new SLR rules for the Islamic banks have already come into effect from Sunday," a senior official of the Bangladesh Bank (BB) told the FE.
The Islami banks maintain only 10.50 per cent SLR instead of the existing 18.50 for the conventional scheduled banks. Because, the Islami banks cannot purchase treasury bills and bonds that involve receipt of interest, as the Shariah rules ban payment or receipt of interest by any individual or institution.
Currently, seven private commercial banks (PCBs) out of 30 are operating under the Islamic Shariah rules, the BB officials said, adding that the banks have their own Shariah Councils to dictate terms of banking under the Islamic rules and regulations.
The banks are Islami Bank Bangladesh Ltd, Al-Arafah Islami Bank Ltd, ICB Islamic Bank Ltd, Export Import Bank of Bangladesh Ltd (EXIM), Social Islami Bank Ltd, Shahjalal Islami Bank Ltd and First Security Islami Bank Ltd.