Photo: Collected
Due to various negative reports, including irregularities and corruption, public confidence in the country's Islamic banks is waning. Consequently, Shariah-based banks are not receiving deposits at the desired rate.
On the contrary, many customers have withdrawn their previous deposits, leading to a significant reduction in the banks' liquidity. However, despite the decrease in deposits and liquidity, the loan disbursement by Islamic banks has increased.
These data have emerged in the quarterly (March, 2024) report of the central bank. According to the report of Bangladesh Bank, while at the end of December last year, the deposits in the fully Islamic banks of the country were Tk 4,03,850 crore, it has decreased to Tk 3,99,549 crore in the March quarter. Deposits fell by Tk 4,300 crore in the first quarter of the year.
Meanwhile, at the end of last December, the loan or investment amount of fully Islamic banks in the country was Tk 4,44,974 crore, which increased to Tk 4,56,994 crore in the March quarter. That means, loans or investments increased by Tk 12,020 crore in the first quarter of the year. The liquidity of the banks has decreased by over 77 percent during the period under discussion. At the end of December, where the liquidity was Tk 5,125 crore, at the end of March it came down to Tk 1,518 crore.
There are currently 10 fully Shariah-based banks in the country. The banks are Islami Bank Bangladesh, Al-Arafah Islami Bank, Exim Bank, Shahjalal Islami Bank, First Security Islami Bank, Social Islami Bank Limited (SIBL), Global Islami Bank, Union Bank, ICB Islamic and Standard Bank.
According to the report of Bangladesh Bank, the total amount of deposits in Islamic style banking in the banking sector at the end of last March quarter was Tk 4,39,456 crore. In the previous quarter i.e. at the end of December, the amount of deposits was Tk 4,43,403 crore. In the span of three months, deposits in Islamic banking decreased by Tk 3,938 crore.
However, despite the decrease in the deposits of Islamic banks, the deposits in the Islamic banking windows of conventional banks increased by Tk 1,113 crore. At the end of March, the amount of deposits in Islamic banking windows of conventional banks stood at Tk 21,545 crore, which was Tk 20,433 crore at the end of December.
During the period under discussion, the remittance income of full-fledged Islamic banks has increased, but the export income has decreased. Expatriates remitted Tk 27,000 crore through Islamic banks in the last March quarter, which was Tk 23,000 crore in December. During this period export earnings came to Tk 29,000 crore, which was more than Tk 30,000 crore in December. That is, during the period, the export income through these banks has come down by more than Tk 1000 crore.
However, import liabilities have increased as export earnings have fallen. A total of Tk 45,828 crore has been paid towards import liabilities through fully fledged Islamic banks. This figure was Tk 42,319 crore in the December quarter.
Messenger/Disha
