Islamic banks are still losing deposits.

Due to various financial irregularities and corruption, customers are still withdrawing deposits from several Sharia-based banks. As a result, the overall deposit amount of banks in this sector is decreasing. In October last year, the banks’ deposits decreased by more than Tk 2,600 crore. In the previous three months (July-September), there was a decrease of more than Tk 8,500 crore. This information has been revealed in the latest report of Bangladesh Bank on the financial situation of Sharia-based banks.

There are 10 fully Sharia-based banks in the country – Islami Bank Bangladesh, Social Islami Bank Limited (SIBL), First Security Islami Bank, Global Islami Bank, Union Bank, ICB Islamic Bank, Exim Bank, Shahjalal Islami Bank, Al-Arafah Islami Bank and Standard Bank. Of these, 5 were under the control of controversial Chittagong businessman S Alam.

Sources say that during the tenure of the fallen Hasina government, Islamic banks under the control of S Alam were looted extensively. This weakened several Islamic banks that were once at the top of customer confidence. They also failed to maintain CRR and SLR as per the instructions of the central bank. Nevertheless, former Governor Abdur Rouf Talukder allowed the banks to conduct transactions despite their current account deficit without taking any action against them. However, the new Governor Dr. Ahsan H. Mansur stopped all the facilities that were provided after the fall of the Awami League government. This led to the true financial picture of the banks starting to emerge. In the meantime, the boards of a total of 11 banks, including these banks, have been dissolved. After that, the liquidity crisis of some of the banks on this list became more pronounced. As a result, the pressure to withdraw existing deposits increased instead of placing new deposits in the banks. However, after the introduction of special interbank lending facilities under the guarantee of Bangladesh Bank and the support of the banks by printing money, their financial situation has started to improve gradually.

According to the report of Bangladesh Bank, at the end of last September, deposits in fully Islamic banks were 3 lakh 88 thousand 935 crore taka, which came down to 3 lakh 86 thousand 314 crore taka at the end of October. That is, deposits decreased by Tk 2,621 crore in October compared to September. In the previous three months (July-September), deposits of Islamic banks had decreased by more than Tk 8,500 crore. However, despite the decrease in deposits in fully Sharia-based banks, growth was seen in Islamic banking branches and windows of conventional banks. In October, deposits in Islamic branches and windows of conventional banks increased by Tk 1,290 crore.

The report shows that at the end of September, the amount of loans or investments distributed by fully Islamic banks was Tk 4,80,045 crore, which increased to Tk 4,80,703 crore in October. Accordingly, loans distributed in October increased by Tk 685 crore compared to September.

When asked about the reason for the increase in loan distribution despite the decrease in deposits, officials of some Islamic banks said that large-scale loan distribution of some Islamic banks that are in crisis has been stopped under the instructions of Bangladesh Bank. However, even though loan distribution is stopped, interest on previous loans is being added. This interest is added to the balance of the disbursed loan. Due to which the balance of the loan has increased. Along with the loan disbursement, imports and expatriate income through banks have increased in October.

The report says that in September, goods worth 11,191 crore taka were imported through banks. In October, it increased to 11,458 crore taka. On the other hand, although expatriate income of 6,408 crore taka was received in September, it increased to 6,955 crore taka in October. However, exports have decreased. Goods worth 9,231 crore taka were exported through banks in September. It decreased to 8,556 crore taka in October.

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