Banking Scenario in Bangladesh
Bismillahir Rahmanir Rahim
An Empirical Study of Performance of
Islamic Banks in Bangladesh with special reference to Islami Bank Bangladesh Ltd
By
Shah Abdul Hannan,
Former Secretary, Ministry of Finance, Government of Bangladesh and M. Fariduddin Ahmad
Deputy Executive President
Islami Bank Bangladesh Limited
________________________________________________
SECTION – I
Banking Scenario in Bangladesh
When Bangladesh came into existence on the 16th December, 1971, the banking sector of Bangladesh was in a total disarray. With the exception of two local banks incorporated in then East Pakistan, all the bigger local banks became inoperational.. Starting with such a humble condition, the Banking Sector of Bangladesh has grown to a great extent.
At present there are 49 Banks in Bangladesh. The structure of Banking in Bangladesh is as under:
1. Nationalized Commercial Banks --- 4 2. Specialized Banks --- 5 3. Private Sector Commercial Banks : a) Conventional Banks --- 25 b) Islamic Banks --- 5
4. Foreign Commercial Banks a) Conventional Banks --- 9 b) Islamic Banks --- 1 ---------------------- Total 49 ----------------------
SECTION – II
Genesis of Islamic Banking in Bangladesh
In August 1974, Bangladesh signed the Charter of Islamic Development Bank and committed itself to reorganize its economic and financial system as per Islamic Shariah.
In January 1981, the then President of People’s Republic of Bangladesh while addressing the 3rd Islamic Summit Conference held at Makkah and Taif suggested, “The Islamic countries should develop a separate banking system of their own in order to facilitate their trade and commerce.”
This statement of the President indicated favourable attitude of the Government of the People’s Republic of Bangladesh towards establishing Islamic banks and financial institutions in the country.
Earlier in November
An Empirical Study of Performance of
Islamic Banks in Bangladesh with special reference to Islami Bank Bangladesh Ltd
By
Shah Abdul Hannan,
Former Secretary, Ministry of Finance, Government of Bangladesh and M. Fariduddin Ahmad
Deputy Executive President
Islami Bank Bangladesh Limited
________________________________________________
SECTION – I
Banking Scenario in Bangladesh
When Bangladesh came into existence on the 16th December, 1971, the banking sector of Bangladesh was in a total disarray. With the exception of two local banks incorporated in then East Pakistan, all the bigger local banks became inoperational.. Starting with such a humble condition, the Banking Sector of Bangladesh has grown to a great extent.
At present there are 49 Banks in Bangladesh. The structure of Banking in Bangladesh is as under:
1. Nationalized Commercial Banks --- 4 2. Specialized Banks --- 5 3. Private Sector Commercial Banks : a) Conventional Banks --- 25 b) Islamic Banks --- 5
4. Foreign Commercial Banks a) Conventional Banks --- 9 b) Islamic Banks --- 1 ---------------------- Total 49 ----------------------
SECTION – II
Genesis of Islamic Banking in Bangladesh
In August 1974, Bangladesh signed the Charter of Islamic Development Bank and committed itself to reorganize its economic and financial system as per Islamic Shariah.
In January 1981, the then President of People’s Republic of Bangladesh while addressing the 3rd Islamic Summit Conference held at Makkah and Taif suggested, “The Islamic countries should develop a separate banking system of their own in order to facilitate their trade and commerce.”
This statement of the President indicated favourable attitude of the Government of the People’s Republic of Bangladesh towards establishing Islamic banks and financial institutions in the country.
Earlier in November
References: 1. Ahmad, Ausaf, Development and Problems of Islamic Banks, Islamic Research and Training Institute, Islamic Development Bank, Jeddah, Saudi Arabia, 1407-H-1987. 2. Ahmed, Dr. Mahmood, “Scope for Micro Enterprise Development in Bangladesh Under Islamic Finance.” Journal of Islamic Banking & Finance, Vol 15, No. 1, the Association of International Islamic Banks, Karachi (Asian Region), (Jan-Mar, 1998). 3. Chapra, M.Umar, Islam and the Economic Challenge, The Islamic Foundation, Nairobi, Kenya and the International Institute of Islamic Thought. London and USA 1416H(1995). 4. Hamud, Sami Hasan, Progress of Islamic Banking : The Aspirations and the Realities, Islamic Economic Studies, Vol. 2, No. 1, Rajab 1415H (December 1994), Islamic Research and Training Institute, Islamic Development Bank, Jeddah, KSA. 5. Huq, M. Azizul, Islamic Banking in Bangladesh with a brief overview of Operational Problem, A paper presented at the seminar held at BIBM on June 24, 1996. 9. Readings in Islamic Banking – Bangladesh Islamic Banker Association, 1984. 13. Scheduled Banks Statistics: Bangladesh Bank Jan – March, 2003. 14. Bangladesh Bank Economic Trends, April, 2003. 21. Bank Parikrama – A Journal of the Bangladesh Institute of Bank Management, Sept – December, 1989. 23. BANK WATCH, Newyork – Jan, 30, 1998. 24. The Financial Express, Dhaka – May 28, 1998. 25. The Holiday, Dhaka – August 29, 1997.