The deposit growth rate was 15.11% compared to the second quarter of last year
The country's Islamic banks saw an increase in both deposits and investments during the second quarter (April-June) of this year amid the novel coronavirus pandemic, according to a report by the Bangladesh Bank.
Released on Tuesday, the report – titled Developments of Islamic Banking in Bangladesh and prepared by the Islamic banking cell of the central bank's research department – said deposits of Islamic banks stood at Tk291,303 crore at the end of June. Compared to the first quarter (January-March), deposits increased by 2.35% or Tk6,692 crore.
Deposit growth rate was 15.11% compared to the second quarter of last year. At the time, the amount of deposits was Tk253,058 crore.
The report said of the deposits, 46.62% were Mudaraba Term Deposits, 18% were Mudaraba Savings Deposits, 9.62% were Mudaraba Special Savings, and 16.73% were other deposits. A total 34.48% of the deposits were in Islami Bank.
First Security Islami Bank was in the second position with 13.03% of the deposits. Exim Bank accounted for 12% of the deposits while Al-Arafah Islami Bank's share was 11.17%.
During April-June this year, the amount of lending or investment by Islamic banks was Tk275,465 crore, which was 3.05% or Tk8,157 crore more than the first quarter. At the end of June last year, the investment of Islamic banks was Tk245,188 crore.
Of the money lent or invested by Islamic banks: 43.91% was in industries and commerce, 23.33% of the money was given as working capital for industries, 11.55% was invested in large and service industries, while 9.05% went to the construction sector.
At the end of June, Tk10,324 crore came to the country in remittances through Islamic banks. This was 2.63% or Tk264 crore more than in the first quarter.
The liquidity of Islamic banks also increased during this period. At the end of June, it stood at Tk93,367 crore, up 29.16% or Tk2,107 crore more than the first quarter.
According to the central bank report, the position of Islamic banks in the overall banking sector of the country has become stronger than before. A quarter of general banking is now done through Islamic banks.
Islamic banks hold 25.04% of the total deposits of banks and 24.93% of investments or loans come from these banks.
Also, 27.12% of remittances come through Islamic banks.
Bangladesh ranked eighth on the Islamic Finance Country Index (IFCI) 2019, moving two notches up from the previous year's position.
The country scored 43.01 this year on the IFCI, according to the global ranking index of the Islamic banking and finance (IBF) market.
The development of Islamic finance in Bangladesh is more comprehensive than other leading Muslim countries like Iran, Saudi Arabia and other important players in the Gulf Cooperation Council (GCC) region, according to the IFCI report.