According to Bangladesh Bank's former deputy governor Khondkar Ibrahim Khaled, Islami Bank Bangladesh speaks about Islamic banking, but it does not act in that way. In his view, the private bank is not following Islamic banking rules of keeping customers as partners of profit or loss. He also alleges that remittances are dropping due to 'dishonest' mobile banking abroad. The statements were made at a seminar in Dhaka where several professors of Bangladesh Institute of Bank Management (BIBM) were present. Khaled said that remittances were dropping because money is being sent through illegal channels in the name of bKash. He advised the Bangladesh Bank to open a new wing to research mobile banking in order to stop transactions outside banking channels. In a research paper published at the seminar, it was said that a large section of the customers of Bangladesh's banks did not have clear ideas about the sector.
Bangladesh Bank did not allow Al-Arafah Islami Bank to sell 10% of its shares to the Islamic Development Bank (IDB). The deal was originally signed in March to invest about Tk 155 crore to acquire a 10% stake in Al-Arafah. Al-Arafah was supposed to issue around 11 crore fresh shares worth Tk 10 each with a premium of Tk 4, in a bid to raise its capital. The board of Al-Arafah is divided over the issue of selling a 10% stake, particularly on the issue of giving veto power to IDB. The aggrieved group had also taken the issue to court opposing the veto power.
Bangladesh Bank (BB) signed separate agreements with six more private banks on Wednesday to facilitate long-term financing under the World Bank funded Financial Sector Support Project (FSSP). Under the agreements, the six banks - Dutch Bangla Bank Limited, IFIC Bank Limited, South East Bank Limited, Standard Bank Limited, Trust Bank Limited, and Standard Chartered Bank - would provide long-term financing for projects in manufacturing sectors. The central bank earlier signed similar agreement with ten other banks. BB Deputy Governor Nazneen Sultana said that the BB under the auspices of International Development Association (IDA) of the World Bank would provide $300 million through FSSP to meet the growing demand for long-term financing for productive sectors in the country.
The central bank's decision not to allow conventional banks to convert into Islamic banks has frustrated half a dozen lenders. Even conventional banks, which were earlier permitted to open branches or windows for Islamic banking, are not allowed to do it anymore. Bangladesh Bank will not entertain their demand, SK Sur Chowdhury, deputy governor of Bangladesh Bank, said yesterday. The banks that are now awaiting the licence to become Islamic Shariah-based banks should have taken their original permits as Islamic banks instead of conventional ones, he said. Some of the applications have been pending for more than two years now.
The central bank has extended ICB Islamic Bank's timeline by three and half years to repay the money it owes to its clients. According to central bank's figures, former Oriental Bank's financial liabilities towards it depositors stand at Tk 7.5 billion. The bank was rechristened ‘ICB Islamic Bank’ in 2007 and a scheme was initiated to pay back the money to its depositors within six and half years. In a circular issued on Sunday, Bangladesh Bank extended the tenure of the scheme by 42 months on a request from the ICB Islamic Bank.
Bangladesh Bank (BB) will introduce Shariah-based refinancing scheme for Small and Medium Enterprises (SMEs) and other thrust sectors, Governor Dr Atiur Rahman said. Referring to the Shariah compliant mode of refinance support from BB's Export Development Fund (EDF), the governor said introduction of similar Shariah compliant refinance support against SMEs and other thrust sector lending by Islamic banks is also underway. The central bank already issued guidelines for Islamic banking in Bangladesh using an approach that delegates to the Shariah-based financing community the self-regulation and oversight of its Shariah compliance practices.
The Islamic Financial Services Board (IFSB) and Bangladesh Bank has successfully organised a "Seminar on Prospects and Challenges in the Development of Islamic Finance for Bangladesh" on 23 and 24 September 2013 in Dhaka. The seminar aimed to create greater awareness on the latest developments on the Islamic financial services industry, and to discuss the issues in further augmenting its role in Bangladesh. The meeting consisted of five sessions where recent developments in the Islamic capital market, regulatory frameworks, microfinance among others were discussed. At the end of the one and a half day seminar, IFSB assured Bangladesh Bank of its constant support for the various initiatives to strengthen the Islamic finance in its member countries.
The Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) and the Bangladesh Bank (The Central Bank of Bangladesh) signed a Memorandum of Understanding (MOU). The objective of the MOU is to establish a basis for the exchange of information between the two institutions on banking industry's condition and operating performance and ICIEC exposures on the banks operating in Bangladesh. It is expected that the MOU will help pave the way forward for ICIEC in meeting its objectives under the IDB Group Member Country Participation Strategy (MCPS) for Bangladesh, through enhance letter of credit coverage and support in terms of political risk insurance coverage of Foreign Direct Investment (FDI). The signing of the MoU should enhance ICIEC's ability to support exporting companies operating in Bangladesh, and also will help to attract more FDI.