Islamic Banking and Taka

An overview of Islamic banks in Bangladesh

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What is meant by Islamic banking?

Islamic banking is a different type of banking system. The elimination of the interest rates system makes it unique. The Islamic banking system is based on Quranic norms and sunnah.

It encourages the value of justice, efficiency, stability and growth. In this system, the risk is equally shared between entrepreneur and capital owner.

The returns of investment are shared among depositors or investors. Islamic banks always search for productive and profitable projects so that they can ensure better returns to their depositors.

In the 1950s, Pakistan first tries to establish an Islamic financial institution in rural areas. But that bank fails to operate for a long time.

 Mit Ghamr Savings Bank, in Egypt, gets huge followers when it established in 1963. After this, there opened many Islamic banks worldwide.

Islami Bank Bangladesh Limited (IBBL) is the first Islamic bank in BD, which started its operation on 13th March 1983.

Why Bangladeshi banks are tends to Islamic banking system?

In Bangladesh, regular banks have to maintain an 18.5% SLR (statutory liquidity ratio) and CRR (cash reserve requirement). They must maintain a maximum of 85% loans-deposit ration.

 But those regulations are much slack for Islamic banks in Bangladesh. They have to maintain only 11%, combined SLR and CRR. They can maintain a 90% loans-deposit ration.  

This system makes a huge difference in their earnings. So, Bangladeshi banks are intended to go to the Islamic banking system. That’s why banks are eager to convert their banking system from commercial to the Islamic system.

In the first quarter of 2020, 3 banks got Islamic bandage. Those are NRB Global Bank, Standard Bank, and Jamuna Bank. IFIC Bank is waiting for the central bank’s green signal.

Islamic bank’s BD is playing a vital role in this countries economy. Total deposits of all Islamic banks in Bangladesh is TK 280228cr, the total investment is TK 262752cr.

Those are about 25% of the total banking sector. They have excess liquidity about TK 9733cr, which is 9.2% of the total banking sector. They have about 1380 branches and about 35900 people work there.

List of all Islamic banks of Bangladesh

  • Islami  Bank  Bangladesh  Ltd
  • EXIM Bank Ltd
  • Al Arafah Islami Bank  Ltd
  • First  Security  Islami  Bank  Ltd 
  • Social  Islami  Bank  Ltd
  • Shahjalal  Islami  Bank
  • Union  Bank
  • ICB  Islamic  Bank  Ltd
  • Standard Bank   
  • NRB Global Bank
  • Jamuna Bank

There are 11 Islamic lenders in Bangladesh. Yet, IFIC bank is waiting for central bank approval.

Beside this list, some Banks have Islamic banking outlets which are providing Islamic banking services.

Islami Bank BD Ltd:

Islami Bank Bangladesh Limited is the largest Islamic bank in Bangladesh. It was inaugurated on 13th March 1983 as a Shariah Based Islamic Banking. Islami Bank has 36.91 native shareholders and 63.09% foreign shareholders.

It has 384 branches including 59 AD Branches & 03 Offshore Banking Units.  IBBL maintains 643 ATM booths in 2020 and 33 IBBL deposit machines and about 6000 shared ATM booths in BD.

It is a public limited company. This bank is listed on Dhaka Stock Exchange Ltd and Chittagong Stock Exchange Ltd. 29% of remittance, enters into our economy using this banking channel.

In 2017, it has 90% of the total Islamic banking assets in Bangladesh. It has about 12 million depositors. Its main investing sector is apparel.

EXIM bank Ltd:

Export-Import Bank of Bangladesh Limited also known as EXIM bank. It founded on 3rd August 1999 as a commercial bank. First, its name was BEXIM, due to legal constraints it changed to EXIM.

EXIM bank was the first bank that converted its banking system from commercial to shariah based Islamic banking in July 2004. By the year 2020, it has 131 branches and 126 ATM booths. Its foreign exchange department playing a vital role in our economy.

It diversifies its investment in textiles, edible oil, ready-made garments, chemicals, cement, telecommunication, steel, real estate and other service industry  EXIM bank foundation has EXIM Bank Scholarship Program, Exim Bank Agricultural University Bangladesh and EXIM Bank Hospital.

Al Arafah Islami Bank Ltd:

Al Arafah Islami Bank is a shariah based Islamic banking system. It was founded on 27th September 1995. It has 201 branches up to November 2021 and 175 ATM booth by December 2019.

It has a microfinance project named Krishi O Grameen Khudra Biniog Prokolpa. Using this project they are helping in the reduction of poverty, development in agricultural sectors, creation of job opportunities.

Its authorized capital is TK 15000 million by 31 December 2018. For the social welfare program, it establishes AIBL English medium madrasa and AIBL library.

Its commitments are, it has a modern, customer-centric Islamic banking system that has demonstrated strong and consistent growth in both deposit mobilization and quality investment execution to maintain its premier position. It offers financial services with the touch of the heart to advise small and medium enterprises, as well as corporate clients through its offices located throughout the country.

First Security Islami Bank Ltd: 

FSIBL inaugurated on 29 august 1999 as a commercial bank. The date of getting license from Bangladesh Bank in September 22, 1999. Date of Opening of First Branch is October 25, 1999.

It converted its banking system to a sharia-based Islamic bank in 2009. It has 184 branches and 158 ATM booths.

It’s current chairman is Mr. Mohammad Saiful Alam. The Corporate Head Office of this bank is in Rangs RD Center, Block: SE (F), Plot:03, Gulshan Avenue, Gulshan-1, Dhaka:1212.

The authorized capital and paid up capital of this institution are respectively Tk.10,000 Million and Tk.7,840.99 Million

Social Islami Bank Ltd:

SIBL was formerly known as Social Investment bank limited. It was founded on 22 November 1995. It has 168 branches, 72 sub-branches, 177 agent outlets and 119 ATM booths.  It is a public limited company.

The name of it’s Managing director and CEO is Mr. Quazi Osman Ali.

The address of this institution is Social Islami Bank Limited, City Center, Level: 19-23, 28 and 29
90/1, Motijheel Commercial Area, Dhaka-1000.

It’s SWIFT Code: SOIVBDDH.

Phone number and Email address are respectively :+88-09612001122 , info@sibl-bd.com

Shahjalal Islami Bank ltd:

SJIBL is a public limited company incorporated in Bangladesh on 1st April 2001 under the companies Act 1994 and listed in DSE and CSE.

It commencement of it’s Business in 10th May 2001.

It maintains 128 branches and 105 ATM booths. The chairman of SJIBL is Mr. Md. Sanaullah Shahid and Managing Director is Mr. Muhammed Shahidul Islam.

The Head Office of this Bank is at Shahjalal Islami Bank Tower, Plot No: 4, CWN(C), Gulshan Avenue, Dhaka-1212.
It’s contact number, Telephone No. 02-222283457, Fax No. 02-222297607, E-mail: sjiblho@sjiblbd.com.
SWIFT code of this bank is SJBL BD DH .

Union Bank BD Ltd:

Union Bank Limited (UBL) was incorporated in Bangladesh on March 7, 2013 as a banking corporation under the Companies Act 1994 (No. C-107837/13). The bank is one of the Sharia-based interest-free banks in the country and its mode of operation differs significantly from that of other conventional banks.

It received permission to start operations from Bangladesh Bank on March 10, 2013 (Ref: BRPD (P-3)/745(60)/2013-1153). Currently, the bank conducts banking operations in accordance with the Islamic Sharia in force in the country.

It is a fourth-generation bank in this region. It operates 85 branches and 43 ATM booths. Its aim is to become a socially committed world-class financial institution.

ICB Islamic Bank Ltd:

The bank was founded on 30th April 1987, following principles of Islamic shariah.  Their actual operations start on May 20, 1987.

They have 33 branches all over the country. Although they have fewer ATM booths for their own and their cardholders can withdraw money more than 950 ATM booths across the country.

Standard Bank Limited:

Standard Bank Limited (SBL) was incorporated on 11th May 1999 as a limited company under the Companies Act 1994 and the Bank successfully progressed in business on 3rd June 1999.

SBL received Islamic banking license on February 9, 2020. It has 138 branches and about 34 ATMs. In 2016, it opened a branch in Saudi Arabia.

SBL has introduced several new products for loan and deposit systems. This also applies to corporate and personal banking, etc. The bank has also participated in the syndication of funds with other banks. Through all these innumerable activities, SBL has had a positive impact on the market.

The asset value of Standard Bank, a company listed on the Dhaka and Chittagong stock exchanges, was Tk 205 crore in 1999 and rose to Tk 11,993 crore in 2015.

In addition to conventional products, the bank also offers Islamic banking products, special loans for the clothing sector, school loans, loans to SMEs, agricultural loans and project financing.

Global Islami Bank:

GIB is a fourth-generation bank. 25 NRB people across the world was the founder of this bank. It was approved on 25th July 2013. It has 69 branches and 65 ATM booths. NRB Global Bank achieved Islamic banking approval on 9th February 2020.

On January 3, 2021, NRB Global Bank renamed itself Global Islami Bank and became a Shariah-compliant bank. In June, Bangladesh Bank accepted the banks’ proposal to raise 42.5 billion takas from an IPO.

Jamuna Bank:

Jamuna Bank was founded on 3rd June 2001. It was a commercial bank. It got a fully Islamic banking badge on 12th March 2020. As of March 2019, it was 132 branches across the country.

Jamuna Bank Limited (JBL) is a registered banking company under the Companies Act of Bangladesh 1994 with its registered office at Jamuna Bank Tower, Plot# 14, Bir Uttam AK Khandaker Road, Block# C, Gulshan- 1, Dhaka, Bangladesh.

The bank offers all kinds of support to trade, industry and all businesses in the country. JBL funding is also available for entrepreneurs to create promising start-ups and BMREs of existing industrial units. The bank was founded by a group of local entrepreneurs with a strong reputation in the commercial, commercial, industrial and business sectors of the country.

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