Islamic Banking and Finance in Bangladesh: Potential, Challenges and Future Development
Bangladesh has already experienced in potential growth in Islamic banking and finances the rapid expansion of Islamic banking and finance in global banking and finance sector. The aim of this study is to assess the present status, potential and challenges of Islamic banking and finance in Bangladesh. An extensive literature review method has been done with multiple indicators for obtaining research objectives. The study uses secondary data sources like journal article, books, periodicals, newspaper article and websites of the central bank of Bangladesh and other commercial banks. This study is done from November to December 2017. The study reveals that the financial performance of Islamic banks is better than conventional banks. In Bangladesh, Islamic banking and finance has a great potential but still have some challenges like lack of Islamic banking and finance infrastructure, lack of concrete legal basis, low attention from the central bank, lack of Islamic capital market and unavailability of shariah law experts and people’s awareness. This study also explores that the research trend in Islamic banking and finance is still in a poor situation and need to improve. The study suggests that a strong legal framework under central Shariah board should be implemented. It further suggests that proper attention from the central bank, introducing Islamic capital market, sufficient Islamic finance instruments, proper training of Islamic bankers, people’s awareness through a seminar, workshop, TV program and daily newspaper are necessary for the sustainable growth of Islamic banking and finance in Bangladesh.
Islamic Banking, Finance, Interest Free, Profit-Loss Sharing, Islamic Economics
Sarker MNI (2016) Poverty of Island Char Dwellers in Bangladesh. Hamburg, Diplomica Publishing GmbH, Germany.
Sarker MNI (2016) Causes and possible solutions of seasonal food insecurity (Monga) perceived by char dwellers in Bangladesh. Int J Ecol Dev Res 1:2–9.
Sarker MNI, Sultana A, Prodhan AS (2017) Financial Performance Analysis of Islamic Bank in Bangladesh: A Case Study on Al-Arafah Islami Bank Limited. World J Econ Financ 3:52–60.
Sarker MNI (2016) Role of Banks on Agricultural Development in Bangladesh. Int J Ecol Dev Res 1:10–15.
Rahman M, Saha NK, Sarker MNI, et al (2017) Problems and Prospects of Electronic Banking in Bangladesh: A Case Study on Dutch-Bangla Bank Limited. Am J Oper Manag Inf Syst 2:42–53. doi: 10.11648/j.ajomis.20170201.17.
Mahmood R, Islam M (2015) Practices of Corporate Governance in the Banking Sector of Bangladesh. Int J Manag Value Supply Chain 6:17–29. doi: 10.5121/ijmvsc.2015.6302.
Abduh M, Hasan SM, Pananjung AG (2013) Efficiency and performance of Islamic banks in Bangladesh. J Islam Bank Financ 94–106.
Ahsan MK (2016) Measuring Financial Performance Based on CAMEL : A Study on Selected Islamic Banks in Bangladesh. Asian Bus Rev 6:47–56. doi: 10.18034.
Chakraborty J (2015) Financial Performance Analysis of Islamic Banks in Bangladesh: A Case Study on Islami Bank Bangladesh Limited (IBBL). Int J Econ Financ Manag Sci 3:99. doi: 10.11648/j.ijefm.20150302.14.
Sarker AA (1999) Islamic Banking in Bangladesh : Performance, Problems & Prospects. Int J Islam Financ Serv 1:1–21.
Memon MI (2013) Islamic Finance and Banking in the Great Recession : A Comparison of Profitability with Conventional Banks. 1–22.
Mamun MZ (2007) Prospects and Problems of Islamic Banking from Bank ’ s Perspective : A Study of Bangladesh. 8th Int Conf Islam Econ Financ 1–21.
Sarker MNI, Wu M, Liu R, Ma C (2019) Challenges and Opportunities for Information Resource Management for E-Governance in Bangladesh. In: Xu et al. J (ed) Proceedings ofthe Twelfth International Conference on Management Science and Engineering Management: Lecture Notes on Multidisciplinary Industrial Engineering. Springer International Publishing, pp 675–688.
Sarker MNI, Rashid MH (2015) An Impact of Banking Activities of Private Commercial Islamic Bank to Economic Development in Bangladesh: A Case Study on First Security Islami Bank Limited (FSIBL). J Invest Manag 4:264–272. doi: 10.11648/j.jim.20150405.28.
Bashar Bhuiyan A, Rashid M (2011) Islamic Microcredit in Bangladesh: Performance Analysis of Rural Development Scheme (RDS) of Islami Bank Bangladesh Limited. Glob J Financ Econ 8:1–21.
Sarker MNI, Jie Z (2017) Social Security for Vulnerable Groups in Bangladesh on Government Perspective : Contribution of Research Leader. J Public Policy Adm 1:1–9. doi: 10.11648/j.jppa.20170101.11.
IFSB (2014) Prospects and Challenges in the Development of Islamic Finance for Bangladesh.
Sarker MNI, Islam S, Rahman M (2015) Effects of electronic banking on performance of banks in Bangladesh. Int J Appl Res Int J Appl Res J 1:28–34.
Uddin MS, Ahsan MK, Haque MA (2017) Comparisons of Financial Performance of Islamic Banks and Conventional Banks in Bangladesh. ABC Res Alert 5.
Uddin H (2014) Measuring the Performance of Islamic Banks in Bangladesh : An Exploratory Study. [International J Ethics Soc Sci Vol2, No1, June 2014] 2:. doi: 10.1002/jcaf.20374.
Al-gazzar MM (2014) The Financial Performance of Islamic vs. Conventional Banks : An Empirical Study on The GCC & MENA Region. Br Univ Egypt 90. doi: 10.1108/17538391111144515.
Kakakhel SJ, Raheem F, Tariq M (2011) A Study of performance comparison between conventional and and Islamic banking in Pakistan. Abasyn J Soc Sci 6:91–105.
Alzoubi T (2015) Profitability Comparison of Islamic and Conventional.
Aziz S, Husin M, Hashmi SH (2016) Performance of Islamic and Conventional Banks in Pakistan: A Comparative Study. Int J Econ Financ Issues 6:1383–1391.
Johnes J, Izzeldin M, Pappas V (2014) A comparison of performance of Islamic and conventional banks 2004-2009. J Econ Behav Organ 103:S93–S107. doi: 10.1016/j.jebo.2013.07.016.
Yousuf S, Islam MM, Islam MM (2014) Islamic Banking Scenario of Bangladesh. J Islam Bank Financ 2:23–29.
Akteruzzaman M, Sarker AA (2016) Developments of Islamic Banking in Bangladesh Coordinator.
Rahman MM (2016) Financial Performance Analysis of Scheduled Commercial Banks in Bangladesh. 4:166–184. doi: 10.13189/ujaf.2016.040503.
Ahmed et al. (2016) Finance & Banking Studies An Empirical Study on Corporate Governance and Islamic Bank Performance : A Case Study of. J Financ Bank Stud 5:. doi: doi.org/10.20525/ijfbs.v5i4.478.
Islam MA, Sarker MNI, Rahman M, et al (2017) Determinants of Profitability of Commercial Banks in Bangladesh. Int J Bank Financ Law 1:1–11.
Rahman MM, Akhter S (2015) Bank-Specific Factors Influencing Profitability of Islamic Banks in Bangladesh. J Bus Technol Volume –X:16.
Safiullah M (2010) Superiority of Conventional Banks & Islamic Banks of Bangladesh: A Comparative Study. Int J Econ Financ 2:199–208. doi: 10.5539/ijef.v2n3p199.
Rashid M, Nishat a (2009) Disparity of Performance Indicators of Islamic Banks: Study on Bangladesh. Int J Bus Manag 4:P52.
Khan T (2017) Ethical Banking and Islamic Banking: A Comparison of Triodos Bank and Islami Bank Bangladesh Limited. Islam Econ Stud 25:111–154. doi: 10.12816/0036190.
Bhuiyan AB, Ismail AG, Rashid M (2011) Performance Analysis of Islamic Bank Microcredit Scheme in Bangladesh. Sixth Natl Conf Malaysian Econ Innov Econ Growth 1:61–72.