Trade through Bangladesh’s 10 Shariah-compliant banks is dwindling, with loans surpassing deposits, creating liquidity challenges. Exports facilitated by these banks dropped by almost 39% in Q2, contrasting the nation’s overall export growth of 7%.
Imports through Islamic banks also declined by 47%. Despite a year-on-year deposit growth of 0.85%, loan disbursements increased by 8.73%, causing an imbalance. Allegations of irregular lending contribute to a crisis of confidence among businesses, affecting deposits. Excess liquidity in these banks fell by nearly 91% to Tk1,073 crore compared to the previous year.
Remittances, however, saw surprising growth, up over 39% year-on-year in Q3, attributed to outstanding import bills and competitive remittance rates. Irregularities and negative attitudes pose challenges, signaling potential difficulties in meeting long-term liabilities for Islamic banks.
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