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The government of Bangladesh is going to introduce Sukuk in the country, said Prof. Shibli Rubayat Ul Islalm, chairman of Bangladesh Securities and Exchange Commission. He believes that sukuk, once introduced, will widely contribute to various development-oriented activities of Bangladesh. Prof. Shibli made the remarks while speaking at the closing ceremony of a 'Workshop on Issuance and Management of Sukuk in Bangladesh'. The four-day workshop was jointly organised by the Central Shariah Board for Islamic Banks of Bangladesh (CSBIB) and the International Shariah Research Academy for Islamic Finance (ISRA), Malaysia.

The International Islamic Trade Finance Corporation (ITFC) has approved a US$15 million Murabaha Financing Facility in favour of City Bank Limited in Bangladesh to support the Bank’s private sector businesses. The financing comes at a critical time as SMEs in Bangladesh and other OIC member countries face the social and economic effects of the coronavirus pandemic. The financing is part of the COVID-19 Response Package through the provision of medical supplies, staple foods and fertilizer for agricultural production to OIC countries including Bangladesh, Egypt, Kyrgyzstan, the Maldives and Senegal.

Bangladesh launched its first digital crowd-funding platform Ekdesh for raising funds and disbursing them as zakat or financial aid. Information and Communication Technology Division State Minister Zunaid Ahmed Palak inaugurated the platform via an online inauguration program. People of the country can donate to the prime minister’s relief fund, the Islamic Foundation, or other non-government organizations through this platform to help the poor people or small businesses. Several organizations like Brac, Bidyanondo Foundation, Center for Zakat Management, Centre for Rehabilitation of the Paralysed (CRP), and Sajida Foundation have already joined the platform.

Microfinance institution SAJIDA Foundation has rapidly diverted its resources and operations to tackle the pandemic from multiple frontiers. On the health front, one of its secondary-care hospitals have been dedicated to the treatment and isolation of Covid-19 patients, while the other has continued general medical services focusing particularly on maternal and child care. At the same time, nearly 2,000 field forces have reached 0.4 million microfinance members with life-saving information regarding the prevention and treatment of Covid-19. Mass awareness raising efforts have included leaflet distribution as well as household visits, while maintaining social distancing measures. SAJIDA’s members have also benefitted from a credit shield facility which supports members through loan outstanding waivers and cash benefits during emergencies.

Standard Chartered is bullish about the fortunes of its Islamic banking business in Bangladesh, Saadiq. The global lender introduced Islamic banking in Bangladesh 15 years ago and has been a trendsetter since. It was the first to introduce Islamic credit card in Bangladesh in 2007 and arrange Sukuk transaction in 2019. The bank has introduced a product, Saadiq Hajj Savers, to provide its customers a one-stop solution for Hajj and Umrah. This account will enable customers to deposit a fixed amount every month and earn profit on their monthly average balance at an attractive rate. Saadiq has another savings product in the works: the Saadiq Graduate account targeting fresh university leavers.

The central bank of Bangladesh approved applications from two domestic banks, Standard Bank and NRB Global Bank, to become fully Islamic banks. The two banks so far only operated Islamic windows but sought to convert to fully-fledged Shariah-compliant banks to enlarge their scope of product offerings. NRB Global Bank said it plans to change its name to Global Islami Bank to underscore its new role. The move brings the number of fully-fledged Islamic banks in Bangladesh to ten, with the others being Al-Arafah Islami Bank, Islami Bank Bangladesh, Exim Bank, Social Islami Bank, Shahjalal Islami Bank, Union Bank, First Security Islami Bank and ICB Islamic Bank. Analysts note that the industry has still high potential for further expansion as Bangladesh enjoys a vibrant economy with GDP per capita having more than tripled over the past decade.

According to a Bangladesh Bank survey, the major barriers to accessing finance in the country are minimum balance requirement, low income, staff attitudes, lack of physical access and high cost of products. Other factors like inadequate financial literacy, lack of proper documentation, lack of initiatives of banks and financial institutions, low level of technological infrastructure, lack of suitable product structure of banks, opportunity cost and high cost of products are also acting as hindrances to access to finance. In Bangladesh a large number of the adult population still remains financially excluded. The major barrier is geographical or physical access measuring the average distance from households to bank branches. Bangladesh has less than seven branches (or ATM) per 100,000 population and about 67 branches (or ATM) per 1,000 square kilometre.

The Anti-Corruption Commission (ACC) filed a case against an incumbent director of Al-Arafah Islami Bank for allegedly laundering Tk 1.68 crore in Singapore. ACC filed the case against Badiur Rahman, who was also chairman of the bank's board of directors between 2008 and 2016. Badiur set up the company Ariel Maritime in Singapore with three directors. Badiur's invested capital was SGD 25,000 in 2003 and he has been operating the company since then. His investment increased to SGD 0.5 million, equivalent to Tk 1,68,38,800. According to ACC, Badiur could not show any acceptable documents to prove legitimacy of the source of income that he invested in the company. To conceal the source of income, he misused his power as a director and secretly transferred the money.

According to Rehan M Shaikh, CEO of Standard Chartered Saadiq, Standard Chartered Bank (SCB) wants to bring more Islamic liquidity into the market as the demand is increasing in Bangladesh as well as in the global markets. Islamic banking has expanded three times from 2007 to 2017 in Bangladesh, with a Compound Annual Growth Rate (CAGR) of 11.6%. The Takaful sector has grown five times with a CAGR of 19.34% during this period. SCB has arranged a $32 million Diminishing Musharakah Facility for Noman Terry Towel Mills and Ismail Spinning Mills. This is the first Islamic syndication arranged by SCB Bangladesh. The facility will finance the company’s capital expenditures and support its export growth.

Ibn Sina Trust is set to sell off its entire 2.24% stake in Islami Bank Bangladesh (IBBL) within the next 30 days. Ibn Sina's exit from the country's biggest private lender comes a few days after the resignation of Chairman Arastoo Khan. The former secretary stepped down on April 17 and was replaced by Md Nazmul Hasan, a professor of the University of Dhaka. Ibn Sina left the bank's board on January 5 this year after a huge reshuffle. Last year, the Islamic Development Bank, one of the foreign investors of IBBL, sold two-thirds of its shares, bringing its stake in the bank down to 2% from 7.5%. In 2014, foreign sponsor-shareholder Bahrain Islamic Bank sold off all of its shares and Dubai Islamic Bank followed suit in 2015.

Ten days after losing its chairman, Islami Bank Bangladesh is preparing to lose one of its biggest sponsor shareholders. Ibn Sina Trust announced its intention to withdraw by the end of next month. The Ibn Sina Trust is the largest local corporate shareholder in Islami Bank. Its 36,077,391 shares are worth around Tk94.16 crore. A year ago, the Islamic Development Bank (IDB) sold off two-thirds of its shares, shrinking its stake in the bank to 2.1% from 7.5%. Two other foreign banks have sold out from Islami Bank in recent years. In 2014, foreign sponsor shareholder Bahrain Islamic Bank sold off all its shares, followed by Dubai Islamic Bank, which sold all its shares in 2015. Islami Bank has always had the reputation of being influenced by Jamaat-e-Islami, the Islamist political organization noted for its connection with the local collaborators of Pakistan occupation forces during the Liberation War in 1971.

The central bank of Bangladesh has suggested encouraging Islamic Shariah compliant investment certificate Sukuk in the capital market. Capital market regulator BSEC pointed out that other Muslim majority countries such as Malaysia, Indonesia, KSA, UAE as well as non-Muslim majority countries like the UK and Singapore have Sukuk in their capital market. It also pointed out that Bangladesh needs to undertake measures to expand capital market for financing productive investments and infrastructural projects. Finance Minister Ama Muhith has recently expressed his plan to pave the way for the long-term financing of the capital market.

ICB Islamic Bank has sought restructuring of the repayment package for depositors of its predecessor Oriental Bank on grounds of a liquidity crunch. The bank still has to return Tk 444.34 crore of now-defunct Oriental Bank's clients, which it was supposed to do by November 2021. ICB Islamic was supposed to refund all clients that had deposits of up to Tk 20 lakh with the Oriental Bank within the next three years. Once returning those clients' funds, ICB Islamic would have to move to refunding those who had deposits of up to Tk 50 lakh. Their claims will have to be settled over the next one and a half years. ICB Islamic has so far repaid Tk 1,521 crore of its predecessor's deposits of Tk 1,946 crore.

Akkas Uddin Mollah has recently been elected chairman of Shahjalal Islami Bank. The election took place at the 259th meeting of the bank's board of directors in its head office in Dhaka. The meeting also reelected Khandoker Sakib Ahmed and Mohammed Golam Quddus as vice chairmen. Mollah is the chairman of Osman Memorial Hospital and Russel Spinning Mills. Ahmed is the managing director of Zuairia Group, while Quddus is a director of the bank representing Anwer Khan Modern Hospital.

In #Bangladesh seven members of Social Islami Bank’s board of directors have resigned from their posts. At the same board meeting nine new directors were appointed. Among the seven that have resigned, four were independent directors: Abdur Rahman, Abdul Muhith, Asaduzzaman and Moinul Hasan. The remaining three were shareholders of the bank. The names of the nine new directors are yet to be known. Earlier Social Islami Bank Limited (SIBL) faced what insiders claimed was a hostile takeover, when chairman and comittee chairman were replaced by Anwarul Azim Arif and Belal Ahmed. Former managing director of SIBL Shahid Hossain also stepped down and was replaced by Quazi Osman Ali. All new directors are connnected to the S Alam group, Belal is the son-in-law of S Alam Group Chairman and Managing Director Mohammed Saiful Alam.

An international workshop on waqf management begins in Dhaka tomorrow. The event is jointly organized by the Islamic Research and Training Institute, Islami Bank Bangladesh and the Centre for Zakat Management. The workshop on the revival of waqf for socio-economic development will review the rules and regulations of waqf management in different countries. President Abdul Hamid is scheduled to inaugurate the event. Islami Bank Chairman Arastoo Khan stated that waqf could play a vital role in developing the country and there were many rich people in the country who want to donate for waqf. A total of 29,341 accountholders of Islami Bank has so far deposited Tk 104 crore under its waqf product called Cash Waqf.

After the top level management of Islami Bank Bangladesh Ltd (IBBL) was removed in January, a similar series of drastic changes takes place in Social Islami Bank Ltd (SIBL). SIBL Chairman Rezaul Haque and Executive Committee Chairman Md Anisul Hoque were replaced by Prof Anwarul Azim Arif and Belal Ahmed. The Managing Director of SIBL, Shahid Hossain, has also stepped down and been replaced by Quazi Osman Ali. The decision to remove the top three of the senior management and the announcement on their replacements was made at a closed door meeting of the bank’s board of directors. The changes are allegedly being backed by Chittagong-based S Alam Group that bought up shares of both banks prior to the takeover.

Islamic banking in Bangladesh is taking shape rapidly with partial practice of Shariah. Islamic banking was first introduced in Bangladesh in 1983 by foreign investors from Saudi Arabia and Kuwait. Currently, eight full-fledged Islamic banks are operating with 1,068 branches in the country. Moreover, 19 Islamic banking branches of nine commercial banks and 25 Islamic banking windows of eight commercial banks are also providing Islamic financial services. According to Md Yasin Ali, professor of Bangladesh Institute of Bank Management (BIBM), most of the Islamic Banks in Bangladesh are not Shariah compliant. Currently, there is no proper regulatory framework for strict monitoring of Islamic banking. The Islamic banks in Bangladesh have been facing excess liquidity problem, which is depriving them of being financiers in public projects.

#Bangladesh-based Social Islami Bank Limited (SIBL) plans to invest $2 million in a real estate-based private equity fund managed by the Islamic Development Bank (IDB). The bank plans to buy 200 shares of Awqaf Properties Investment Fund (APIF) for $10,000 each. A 2% stake in the fund will be enough to give SIBL a seat on the APIF board. SIBL claimed that participating in the APIF equity would benefit it in various ways. It would optimise the facilities delivered to Awqaf customers and enhance the returns to investors. According to SIBL managing director Shahid Hossain, SIBL will get 90% of net income per certificate apart from yearly dividend. The secretary of Financial Institutions Division, Eunusur Rahman, said they would place a proposal before the Cabinet committee on Economic Affairs to allow local companies invest abroad after discussions with the Finance Minister.

Bangladesh has a burgeoning Islamic finance industry focused on the retail market, but there is no comprehensive legal framework for the sector. Bangladesh has 8 Islamic banks and 15 non-Islamic banks that offer Islamic-banking services through Islamic windows. Currently, the Islamic finance sector in the country is led by Islami Bank Bangladesh which manages around 90% of Islamic-banking assets and deposits. Takaful is also growing in popularity. Bangladesh currently has 11 companies for both the life and non-life takaful market at a combined asset base of close to $1bn and a market share of 17%. The central bank has been working for considerable time on an industry-wide regulation to expand beyond retail banking. At present there are no regulations for sukuk issuances even though there would be huge market for both sovereign and corporate sukuk. Other challenges than the absence of comprehensive regulations are a lack of service diversification and a lack of a skilled workforce.