An Impact of Islamic Banking and Finance to Economic Development in Bangladesh: A Case Study on First Security Islami Bank Limited (FSIBL)”

Abstract

Islamic banking and finance operate under Shariah (Islamic law) principles, emphasizing risk sharing, ethical investments, and prohibiting interest (riba). Due to the rapid rise of Islamic banking and finance in the global banking and finance sector, Bangladesh has recently seen the anticipated expansion of Islamic banking and finance. Islamic banking and finance in Bangladesh have enormous potential, but they also face certain obstacles, such as a lack of infrastructure for these sectors, a lack of a clear legal foundation, a lack of central bank consideration, a lack of an Islamic capital market, and difficulty accessing Shariah law experts and raising public awareness. This thesis examines the principles and practices of First Security Islami Bank Limited (FSIBL) in Bangladesh along with its effect on economic development in Bangladesh, focusing on its compliance with Islamic financial doctrines, operational models, challenges, and future prospects. The study evaluates FSIBL’s adherence to Shariah principles, its financial products, and the competitive landscape of Islamic banking in Bangladesh. Through a content analysis, the study examines this bank's published texts, articles, websites, and annual report. The study's main conclusions highlight the bank's contributions to Bangladesh's economic development in a number of areas, including job creation, foreign remittance earnings, rural economy strengthening, green banking and ecology promotion, industrialization, SMEs development, aiding in import-export trade, and housing sector development. The substantial contribution that FSIBL makes to the national exchequer is also noted in this report. This research fills a vacuum in the literature in this particular area and advances the field of Bangladesh's economic development and the role played by FSIBL. According to the study, Islamic banking significantly influences Bangladesh's economic growth. Key Words: Risk sharing, Capital market, Financial products, etc.