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The share of the total Investment of Islamic banks accounted for 24.02 percent among the all banks at the end of July to September quarter in 2018 which was 23.93 percent in the previous April to June quarter, according to the Bangladesh Bank (BB) latest data.
“Among different segments of Bangladesh’s Islamic finance industry, the Islamic banking industry is dominating. The Islamic banking segment continued to show rapid expansion in terms of growth of assets, deposits, investments and number of account holders,” a Bangladesh Bank (BB) senior official told BSS.
He said the share of Islamic banking sector can be reckoned close to 25 percent of the entire banking sector and it plays a significant role in mobilizing deposits and financing different sectors of the economy.
During the July to September quarter, the total investments (loans in conventional sense) in Islamic banking sector stood at Taka 2,20,343.15 crore which went up by Taka 3,515.72 crore or by 1.62 percent compared to the previous quarter and by Taka 27,098.88 crore or by 14.02 percent compared to the corresponding quarter of the preceding year.
During the July to September period, the total deposits in the Islamic banks reached Taka 2,27,814.44 crore, which increased by Taka 3,056.64 crore or by 1.36 percent compared to the previous quarter and by Taka 23,807.38 crore or by 11.67 percent compared to the corresponding quarter of the last year.
The Investment-Deposit Ratio (credit-deposit ratio in conventional sense) reached 0.97 in July-September quarter which was 0.96 in the previous quarter of 2018 and 0.95 at the end of September 2017.
The total remittances mobilized by the Islamic banking sector stood at Taka 12,281.95 crore at the end of July-September 2018 quarter, which was higher by Taka 820.05 crore or by 7.15 percent compared to the previous quarter as well as higher by Taka 2,402.23 crore or by 24.31 percent compared to the corresponding quarter of the preceding year.
The number of branches of Islamic banking sector including Islamic branches or windows of conventional commercial banks stood at 1,200 at the end of the July-September quarter while there were 1,178 branches during the previous quarter and 1,126 during the corresponding quarter of 2017.
After analyzing the sector-wise investments, it is observed that Islamic banks’ investment in the trade and business sector was 34.55 percent, which was the highest among all sectors at the end o f July to September quarter, 2018.
In the quarterly report, BB said Islamic banks should pay more attention to research and development (R&D) to devise the proper guidelines and policies to promote investments under the mudaraba and musharaka modes.
Talking to BSS, Social Islami Bank Bangladesh Limited (SIBL) Chairman Professor M Anwarul Azim Arif said there are huge potentialities of Islamic banking in Bangladesh as most of the people in the country are followers of Islam and the Islamic banking is following the rules of Islamic Shariah.
“We are providing training to our officials in the bank’s training institute to help them gather more knowledge on Islamic banking for expediting Islamic financial industry as it intends to ensure human welfare,” he added.