EBL strengthens the foundations of Islamic finance growth

As the Islamic banking landscape in Bangladesh evolves, it is moving beyond its traditional identity to become a cornerstone of our national financial architecture. Below are my insights regarding the current trajectory, our performance at EBL, and the strategic path forward for Shariah-compliant finance.

The future of Islamic banking in Bangladesh

Islamic banking in Bangladesh has long been recognized for aligning with the religious values of our Muslim-majority population. For decades, it gained popularity by promising ethical, interest-free banking. However, we are now witnessing a historic shift: Islamic banking is no longer just a niche alternative; it is emerging as a mainstream system.

Supported by policy direction from Bangladesh Bank and rising customer demand, I foresee accelerated and diversified growth. Key prospects include expansion into corporate, SME, and retail financing , alongside the rapid growth of digital services like mobile and app-based banking. We also expect the development of sovereign and corporate Sukuk markets , increased participation in capital markets , and the integration of social finance tools such as Zakat, Waqf, and Sadaqah. Furthermore, the sector is poised to attract foreign and Middle Eastern investments while driving financial inclusion in rural areas.

Drivers of popularity

The shift toward Islamic banking is fueled by its strong ethical foundation and alignment with Maqasid al-Shariah, which emphasizes justice, transparency, and social welfare. Unlike traditional banking, it promotes risk-sharing rather than risk transfer, avoids Riba (interest), and ensures all financing is asset-backed. As awareness grows, more consumers are actively seeking products compatible with their faith. This growth is further bolstered by regulatory support and the introduction of Islamic monetary instruments by the central bank.

EBL Islamic Banking: Performance Highlights 

Since launching in August 2024, EBL Islamic Banking has quickly established itself as a trusted, innovation-led provider. Our operations are guided by a robust Shariah Supervisory Committee to ensure all services are ethical and faith-aligned.

Key Highlights

• Started Islamic Banking Operations: August 22, 2024.
• Duration of Operations: One and half years.
• Onboarded Number of Customers: 17,000+.
• Deposits: Tk2,100 Crore+ (As of Dec 31, 2025).
• Financing, Investment & Placement: Tk2,000 Crore+ (As of Dec 31, 2025).
• Operational Structure: Separate accounting and fund management system from Conventional.
• Regulatory Milestone: First Islamic window-based bank to achieve an AD license from Bangladesh Bank.
• Innovation: Established a Centralized Islamic Trade Finance Unit.
• Compliance: Ensured Shariah-compliant profit distribution system for depositors.
• Reach: Expanded Islamic banking windows and helpdesks nationwide.
• Profitability: Improved profitability through a wide range of Shariah-compliant products and services.

Strategies for rebuilding depositor confidence

Restoring trust requires unwavering transparency and strict governance. My proposed strategies include:

• Strengthening Shariah governance and ensuring independent oversight by Bangladesh Bank.
• Implementing punitive measures for Shariah compliance breaches and introducing regulatory Shariah compliance ratings.
• Ensuring transparency in profit calculation and distribution while employing specialized professionals.
• Standardizing Shariah documentation and accounting practices across the industry to ensure consistency.

Developing the Sukuk Market

The Sukuk market is vital for mobilizing capital for national development. It facilitates infrastructure financing, provides an alternative to conventional bonds, and enhances liquidity management for financial institutions. By introducing short-term Sukuk for retail investors and promoting "green Sukuk" for renewable energy, Bangladesh can diversify its funding sources and boost its profile as a global Islamic finance hub.

The Need for Regulatory Assistance

To truly diversify our product offerings, we require continued regulatory support that includes:

• Issuing updated, comprehensive Islamic banking guidelines and standardized Shariah contracts.
• Strengthening support for cross-border Islamic trade finance and enhancing disclosure standards.
• Development of Islamic interbank and liquidity management instruments
• Enhancing disclosure, reporting and accounting standards for Islamic banks
• Allowing simplified and standardised profit distribution mechanisms. 

Engaging NRBs and Promoting Sustainable Growth

To attract Non-Resident Bangladeshis (NRBs), we must offer targeted Sukuk, Shariah-compliant foreign currency deposits, and seamless digital onboarding with minimal documentation.

Finally, Islamic banking is uniquely positioned to foster inclusive growth. By financing real economic activities in SMEs, agriculture, and rural sectors—and by integrating social finance tools like Zakat and Waqf—we can increase financial literacy and provide access to the unbanked.