A country report on Islamic Banking in Bangladesh has been published in Islamic Finance News (IFN) Annual Guide-2014.
For the past seven years, the leading Islamic finance news provider publishes this Annual Guide from Malaysia which provides the industry's leading practitioners with a practical and resourceful review of the global Islamic financial market.
This IFN Guide-2014 included reports of 30 countries across the world of every major Islamic market and asset class and also traverses the global Islamic financial landscape covering the diverse sectors of debt capital markets, leasing, micro finance, regulation, securitisation, Sukuk, Takaful, technology and tax.
The country report titled "Huge demand for Islamic Banking in Bangladesh", authored by Touhidul Alam Khan briefly narrated that the Islamic banks in Bangladesh have shown remarkable growth in both 2012 and 2013 in terms of total assets, total liabilities, total deposits and total financing and advances. The Islamic banking asset base has been grown by 28.3% as investments (financing and advances) grew by 25%; and similarly the liability base has grown by 28.6% due to an increment of 22.9% in deposits in 2012 compared to that of 2011. In addition to that, net profit demonstrated a 39% growth as compared to 2011.
While conventional banks suffered declining profitability in 2012, especially towards the end of the year, Shariah banks showed their prudence and efficiency in managing assets and attaining profits, snapping the trend of increasing non-performing loans (NPLs) in the banking system in Bangladesh. Islamic finance is one of the fastest growing sectors in the republic's financial industry in Bangladesh.
"The Islamic banks in Bangladesh generally have higher capital adequacy ratios and lower non-performing loan ratios than their conventional banking counterparts," an expert commented.
Aggregate assets and deposits of Islamic banks in Bangladesh have nearly doubled in the last four years; by the end of 2012 aggregate assets and deposits both crossed trillion taka threshold, comprising around a fifth of total banking sector assets and liabilities. This share of Islamic banking looks set to grow further with time, given its faster growth than conventional banking."
"The Islamic banking industry in Bangladesh will celebrate its Golden Jubilee in the year 2033 marking its 50th year. And the present shape of the industry is being modernized in terms of this changing scenario forecasting on the world economy in the year 2033," said Touhidul Alam Khan, Senior Executive Vice President & Head of Corporate Assets & Client Origination and also Team Leader of Green Banking Unit of Bank Asia Limited.
The government can help to explore the growth opportunities for Islamic finance, as well as tax and regulatory developments to boost the country's Islamic capital markets. With the proper implementation of regulations, education and understanding of Islamic financial products, and the provision of sufficient infrastructure, Bangladesh is set to become a major player in the field of Islamic finance of the world," Mr Touhidul Alam Khan added.
