NCC Bank sees Islamic banking as a key driver of inclusive economic growth

The trajectory of Islamic banking in Bangladesh is no longer a matter of speculation—it is a reality unfolding before us. From where I stand, the sector is not just growing; it is steadily cementing itself as a central pillar of the country's financial system.

To begin with, Islamic banking already accounts for more than one-fifth of the total banking market in Bangladesh. That is no small share. What makes this growth particularly compelling is the nature of the demand behind it. A large segment of the population is actively seeking ethical, interest-free financial solutions that align with their values. This is not a temporary trend—it reflects a deeper shift in consumer preference.

The numbers reinforce this optimism. We are witnessing consistent double-digit growth across key indicators—assets, deposits, and investments. This suggests not just expansion, but resilience. At the same time, technological adoption is accelerating, and both Islamic banking windows and full-fledged branches are expanding rapidly. Even conventional banks are stepping into this space, which further validates its potential.

For institutions like NCC Bank, the way forward is clear. We must expand our outreach, ensure uncompromising Shari'ah compliance, and continuously innovate with customer-centric products. With the right regulatory support and effective branding, I genuinely believe Bangladesh can position itself as a regional hub for Islamic finance.

One of the most common questions I encounter is why Islamic banking is gaining ground over traditional banking. The answer lies in its foundation. Islamic banking is built on ethics, transparency, and risk-sharing. It prohibits interest (riba) and instead promotes asset-backed financing and partnership-based models such as Mudarabah and Musharakah.

Customers today are more aware and more discerning. They are drawn to fairness, social justice, and systems that prioritise real economic activity over speculation. Islamic banking, by its very design, avoids excessive risk and focuses on tangible assets. This also makes it more resilient during financial shocks.

Another critical factor is financial inclusion. A significant portion of the population has historically remained outside the formal banking system due to reservations about interest-based finance. Islamic banking provides them with a viable alternative, thereby expanding the overall customer base and strengthening the financial ecosystem.

At NCC Bank, we have made considerable progress in a relatively short span of time. We have already established full-fledged Islamic banking branches in Gulshan (Dhaka), Muradpur (Chattogram), Feni, and Thakurgaon. In addition, we are operating Islamic banking windows in 32 branches across the country. The response from customers has been overwhelmingly positive, which reflects both trust and strong market acceptance.

Our product portfolio is designed to meet diverse customer needs while strictly adhering to Shari'ah principles. We offer deposit products such as Al-Wadeeah Current Accounts, Mudarabah Savings and Term Deposits, along with specialised schemes like Monthly Profit Deposits and Cash Waqf. All of these are developed in line with the Qur'an and Hadith, under the supervision of our Shari'ah Supervisory Committee.

We have also invested in a strong technological backbone and a dedicated Islamic Banking Division to ensure efficient and compliant service delivery. Looking ahead, we have a clear roadmap: subject to Bangladesh Bank's approval and guidelines, we aim to gradually transition towards full-fledged Islamic banking within the next three to four years by shifting existing operations and expanding new business lines.

However, growth alone is not enough—we must also address confidence. Rebuilding depositor trust requires a comprehensive approach. First and foremost, strict Shari'ah compliance must be ensured, with transparent oversight by an independent Shari'ah Supervisory Committee. Transparency in reporting and clear communication about how funds are utilised are equally important.

Strong governance frameworks, aligned with central bank regulations, must be in place. At the same time, we need to invest in customer education—many people still do not fully understand how Islamic banking differs from conventional systems. Finally, digital trust plays a crucial role. Customers must feel confident that their transactions are secure, seamless, and reliable. At NCC Bank, integrity, consistency, and customer-centric service remain at the heart of our trust-building efforts.

Another area where I see immense opportunity is the development of the Sukuk market. Islamic bonds can play a transformative role in mobilising long-term funds for infrastructure, SMEs, and large-scale development projects. The beauty of Sukuk lies in its asset-backed and risk-sharing nature, which makes it attractive to both domestic and international investors.

Given the size and growth of Bangladesh's Islamic banking sector, we are well-positioned to build a vibrant Sukuk market. This would not only deepen our capital markets but also reduce reliance on conventional debt instruments and attract foreign investment, particularly from Middle Eastern economies.

That said, regulatory support will be key to unlocking the full potential of Islamic banking. A dedicated Islamic Banking Act would provide a comprehensive legal framework tailored to its unique operational structure. Standardisation of Shari'ah guidelines is also essential to ensure consistency across institutions.

The establishment of a central Shari'ah board would further enhance credibility. Additionally, tax neutrality between Islamic and conventional products must be ensured to create a level playing field. Regulators should also encourage innovation through research and development, particularly in areas like Sukuk and other advanced financial instruments. Finally, the development of Shari'ah-compliant liquidity management tools and money market instruments is crucial for the sector's stability and growth.

When it comes to Non-Resident Bangladeshis (NRBs), the opportunity is significant. A large number of NRBs, especially those residing in the Middle East, are naturally inclined towards Shari'ah-compliant financial solutions. By offering tailored products—such as Mudarabah deposits, Waqf accounts, and Shari'ah-compliant investment schemes—we can effectively tap into this segment.

Seamless digital platforms, competitive returns, and efficient remittance channels will further enhance engagement. It is worth noting that a substantial portion of remittances already flows through Islamic banking channels, which indicates strong existing demand and room for further growth.

Ultimately, what makes Islamic banking truly compelling is its alignment with sustainable and inclusive development. It promotes financial inclusion by bringing unbanked populations into the system. It contributes to poverty alleviation through microfinance, SME financing, and rural development initiatives. It prioritises ethical investment by avoiding harmful industries and supporting socially responsible sectors.

Moreover, its emphasis on risk-sharing reduces systemic vulnerabilities and promotes equitable wealth distribution. Increasingly, Islamic banking is also supporting green financing initiatives, contributing to environmental sustainability.

In essence, Islamic banking is not just an alternative financial system—it is a more balanced approach to economic growth. By aligning financial activities with social welfare and economic justice, it has the potential to shape a more inclusive and sustainable future for Bangladesh.