Islamic banking in district towns not expanding
17 March 2015, Nirapad News: Country’s commercial and scheduled banks are providing few services of Islamic banking in the local areas despite of its growing popularity among the people.
A Bangladesh Bank (BB) report revealed the data on Monday, saying the ratio of providing the Islamic banking service is higher in urban area than the semi-urban areas, leaving people deprived of the service.
Currently, a total of eight banks have been operating full-fledged Islamic banking service, nine commercial banks running separate branches for Islamic banking, and eight other banks providing the service.
All these banks are providing their services through a total of 934 branches across the country. Of witch, 602 braches are located in city areas and 332 are in district towns. However, demand for several hundred branches remains unfulfilled across the country.
According the report, deposit of Islamic banks has increased at 21 percent from December 2013 to December 2014 whereas the investment was increased at 20.67 percent at the same time.
The central bank opined that deposit and investment growth of these banks are satisfactory. But the amount of their extra money has gradually been increasing. The banks could not boost their investment due to less demand.
The banks could not invest the extra money in industrial and business sectors. As a result, they are buying government bonds and investing a large amount of the money with less profit.
Noted banker Mamun Rashid told banglanews that investment of all banks has somewhat decreased due to the existing political situation. But, the investment will increase, if the Islamic banks open branches in town areas in place of cities, the economic analyst added.
However, Bangladesh Bank general manager and assistant spokesperson AFM Asaduzzaman, said banks that have been operating Islamic banking services, are not being permitted to open branches in city areas unless setting up offices in the district towns.