| dc.description.abstract | Starting its journey in 1983, Islamic banking has been gaining increasing market share of the total
banking industry; 8 full-fledged Islamic banks, along with 19 Islamic banking branches and 25 Islamic
banking windows, hold more than 20% market share in total banking deposits and 23% in credit. This
percentage of share has made Bangladesh one of the 12 systematically important jurisdictions in the
world. This industry, compared to its conventional counterpart, is also performing well in many aspects
such as ROI and NPL. The scenario changes when the banking scenario of other Muslim countries with
similar demographics and economic status are compared with. The Islamic banking scenario in
Bangladesh could be made more robust if the challenges in the way were properly addressed. The
absence of a comprehensive Shariah based framework to bring all the related industry players under
one umbrella is one of the most crucial factors hindering growth. Terrorist financing propaganda, lack
of diversified service portfolio, insufficient product innovation and absence of skills and product
knowledge training are few of the other challenges to be addressed. Even though, throughout the world,
60% of the Islamic banking customers are non-Muslims, in Bangladesh, this segment is not yet targeted
as the Islamic products are, even now, offered to customers using religious appeal rather than pitching
product qualities and professional benefit. If
Bangladesh is to reach its fullest potential in this segment of banking, steps from multiple front need to
be taken. The untapped non-Muslim customer segment penetration can be the first step. Partnering with
NGOs and thus tapping further into micro-finance, public project financing through Shariah based
syndication, creating a corporate governance culture by training Islamic finance analysts, and bringing
in stress testing modules to check the resilience of Islamic banking in the country for different
categories of financing are the few ways towards further growth in this industry. In order to bring out
the potential growth, there has to be a strategic time bound roadmap setting out all the landmarks to be
achieve | en_US |
