The globally-flourishing Islamic finance is making treads and getting acceptance in Bangladesh, with experts foreseeing that the shari`ah-compliant industry will proceed in steady steps to become the principal banking system in Muslim South Asian country.
Mominul Islam Patwary, who is the Chairman of the executive committee of Islami Bank Bangladesh Limited, said: “The future of the Islamic banking systems is so bright,” on the site of IslamOnline.net.
The Islamic banking is perceiving powerful growth in Bangladesh. Bangladesh participated in the Islamic banking system in 1983, with the foundation of Islami Bank Bangladesh. Later on, five more fully-equipped private Islamic banks and 20 Islamic banking branches of conventional banks have been established.
Patwary says that his bank is now one of the top performing banks in terms of transaction and profits among the 48 commercial banks in operation in the country. Islamic Bank Bangladesh Limited has achieved first position among all private banks in terms of deposits, investment, export and import and remittance collection. On the authority of Bangladesh Bank (BB), which is the central bank of the country, the deposits of the Islamic banking systems are now 25 % of all private banks’ deposits and its investments are 30 %.
Bahauddin Mohammad Yousuf, who is the vice chairman of Al-Arafah Islamic Bank, has an explanation for Bangladesh’s Islamic finance flourish. He says that for a Muslim, whose religion prohibits taking or giving interests, Islamic banking makes it possible to run interest-free dealings. “People of this country are religious,” Patwary, of the Islamic Bank, agrees. Islam bans usury for Muslims, receiving or paying interest on lendings. Islamic banks and finance foundations cannot receive or provide funds for anything unlawful such as alcohol, gambling, pornography, tobacco, weapons or pork.
Shari`ah-compliant financing deals are similar to “lease-to-own” arrangements, “layaway plans”, “joint buying and sale” agreements, or partnerships. Bangladesh has a 148 million population. 80 % of this population are Muslims. Therefore, it is the world’s third-largest Muslim majority country.
Bankers accept that Islamic banking is begun for even more development, if a law governing Islamic Banking principles is passed. Patwary said: “If an Islamic banking Act is introduced, the Islamic banking systems will even further flourish.” Experts foresee that with the rapid increase of Shari`ah-based systems, the industry will finally change to be the financial principal in Bangladesh.
M Azizul Haque, a chief expert on Islamic banking in Bangladesh, told IOL: “The riba-free Shari`ah-based systems will be principal Banking and the conventional banks will be the minority systems in the OIC countries including Bangladesh within 2002”. He is also chairman of the Shari`ah Council of Dhaka, thinks that Bangladesh will follow the rest of the world to the Islamic banking industry. He describes that the growth rate of Islamic banking in the OIC countries for example is 15 to 20 %, while that of conventional banks is 10 to 15 %. Islamic finance is one of the quickest growing sectors in the international monetary industry. In rebelliousness of the credit crackle, the international Islamic finance market has grown about 15 % in each of the past three years, and is worth about $700 billion global.
Presently, there are almost 300 Islamic banks and financial foundations worldwide. Its resources are foreseen to grow to $1 trillion by the year of 2013. Azizul Haque awaits that higher growth rates in the next ten years will force the international finance systems to Islamic banking. The well-known economic expert said: “There is not any sort of anxiety concerning the success of Islamic banking. Capitalization cannot solve the global economic difficulties. The world is seeking a new economic order. Islamic economic system will be the new economic order expected”.