Banking Situation in Bangladesh Essay

Bismillahir Rahmanir Rahim

An Empirical Study of Performance of

Islamic Banking institutions in Bangladesh with particular

reference to Islami Bank Bangladesh Ltd


Shah Abdul Hannan,

Previous Secretary, Ministry of Financing, Government of Bangladesh and

M. Fariduddin Ahmad

Deputy Executive Chief executive

Islami Traditional bank Bangladesh Limited


SECTION – I actually

Banking Scenario in Bangladesh

When Bangladesh came into existence within the 16th Dec, 1971, the banking sector of Bangladesh was in an overall total disarray. Except for two neighborhood banks included in in that case East Pakistan, all the greater local banking companies became inoperational.. Starting with this sort of a humbleВ condition, the Banking Sector of Bangladesh has grown largely.

At present there are 49 Banking companies in Bangladesh. The composition of Financial in Bangladesh is as below:

1 . Nationalized Commercial Banks--- 4

installment payments on your Specialized Banks--- 5

three or more. Private Sector Commercial Financial institutions:

a) Typical Banks---25

b) Islamic Banks--- 5

four. Foreign Industrial Banks

a) Conventional Banks--- 9

b) Islamic Banks--- 1





Genesis of Islamic Banking in Bangladesh

In August 1974, Bangladesh signed the Charter of Islamic Creation Bank and committed by itself to reorganize its financial and economic climate as per Islamic Shariah.

In January 81, the then simply President of People's Republic of Bangladesh while handling the 3rd Islamic Summit Seminar held in Makkah and Taif advised, " The Islamic countries should develop a separate bank system of their own in order to assist in their trade and business. ”

This kind of statement of the President indicated favourable attitude of the Federal government of the Someones Republic of Bangladesh towards establishing Islamic banks and financial institutions in the area.

Earlier in November 80, Bangladesh Lender, the country's Central Traditional bank, sent a representative to study the significant of several Islamic financial institutions abroad.

In November 1982, a abordnung of IDB visited Bangladesh and confirmed keen fascination to take part in establishing a joint venture Islamic Bank inside the private sector. They found a lot of work had already been done and Islamic bank was in a ready form for immediate launch. Two professional bodies Islamic Economics Study Bureau (IERB) and Bangladesh Islamic Bankers Association (BIBA) made significant contributions to introduction of Islamic bank in the country.

They will came forward to provide training on Islamic banking to top bankers and economic analysts to fill-up the cleaner of leadership for the future Islamic banks in Bangladesh. Additionally, they held workshops, symposia and workshops on Islamic economics and bank throughout the nation to mobilize public view in favour of Islamic banking.

Their particular professional activities were sturdy by a quantity of Muslim internet marketers working under the aegis of then Muslim Businessmen Culture (now reorganised as Industrialist & Business people Association). Your body concentrated mainly in mobilising equity capital for the emerging Islamic bank.

At last, the very long drawn find it difficult to establish a great Islamic bank in Bangladesh became a reality and Islami Bank Bangladesh Limited began on thirtieth March, 1983 in which nineteen Bangladeshi countrywide, 4 Bangladeshi institutions and 11 banks, financial institutions and government bodies of the Middle East and European countries including IDB and two eminent personas of the Kingdom of Saudi Arabia joined hands to make the fantasy a reality.

After, other a few Islamic Banking companies were established in the country. 7 conventional banks have until now established Islamic Banking divisions in some key cities.


Comparative Location of Islamic Banking and Conventional Bank in Bangladesh.



References: 1 . Ahmad, Ausaf, Development and Problems of Islamic Banking institutions, Islamic Exploration and Training Institute, Islamic Development Lender, Jeddah, Arab saudi, 1407-H-1987.

installment payments on your Ahmed, Doctor Mahmood, " Scope intended for Micro Enterprise Development in Bangladesh Beneath Islamic Financing. ” Journal of Islamic Banking & Finance, Volume 15, Number 1, the Association of International Islamic Banks, Karachi (Asian Region), (Jan-Mar, 1998).

3. Chapra, M. Umar, Islam as well as the Economic Problem, The Islamic Foundation, Nairobi, Kenya and the International Commence of Islamic Thought. London and UNITED STATES 1416H(1995).

four. Hamud, Sami Hasan, Improvement of Islamic Banking: The Aspirations and the Realities, Islamic Economic Research, Vol. a couple of, No . you, Rajab 1415H (December 1994), Islamic Analysis and Schooling Institute, Islamic Development Financial institution, Jeddah, KSA.

5. Huq, M. Azizul, Islamic Bank in Bangladesh with a brief overview of Functional Problem, A paper provided at the seminar held for BIBM on June 24, 1996.

9. Readings in Islamic Bank – Bangladesh Islamic Banker Association, 1984.

13. Planned Banks Figures: Bangladesh Traditional bank Jan – March, the year 2003.

14. Bangladesh Bank Financial Trends, April, 2003.

twenty one. Bank Parikrama – A Journal in the Bangladesh Institute of Bank Management, September – January, 1989.

23. BANK VIEW, Newyork – Jan, 35, 1998.

twenty-four. The Financial Express, Dhaka – May 28, 1998.

25. The break, Dhaka – August 29, 1997.

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