Islamic banks, FIs asked to participate in Shariah-based refinancing scheme

The central bank has asked Islamic banks and non-banking financial institutions (NBFIs) to participate in its newly introduced Shariah-based refinancing scheme.

The advice came at a meeting with the senior executives of the Islamic banks and NBFIs held at the central bank Thursday with Deputy Governor of the Bangladesh Bank (BB) Abul Quasem in the chair.

At the meeting, the central bank assured the Islamic banks and NBFIs that it would provide extra fund in the scheme if necessary, a BB official told the FE.

"We want the excess funds of Islamic banks and NBFIs will be utilized in the priority sectors including agriculture and eco-friendly green projects through introduction of the scheme," the central banker noted.

Five Islamic banks have already deposited Tk 3.75 billion with the BB's newly opened account for introducing the refinancing scheme exclusively for Sharia-based banks and NBFIs.

"We expect that more Islamic banks will be deposited their excess fund with the account shortly," the BB official observed.

Currently, eight Islamic banks and two NBFIs are running their businesses across the country.

The central bank has already issued necessary directives and guidelines to run the refinancing scheme properly.

"The refinancing scheme will help utilizing excess funds of the Islamic banks and NBFIs," Mahbub-ul-Alam, deputy managing director of the Islami Bank Bangladesh Limited (IBBL), told the FE after the meeting.

He also said the IBBL has already deposited Tk 2.0 billion with the BB's account for making functional of the refinancing scheme.

"We may deposit more fund with the account after fulfilling our internal requirements," he noted.

The central bank opened the account for introducing a refinancing scheme exclusively for Sharia-based banks and NBFIs on September 18 last to utilise excess funds with them.

Under the new scheme, the Islamic banks and NBFIs are allowed to invest their excess funds on three-month renewable basis after maintaining the BB's requirements.  

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