In February, the 10 full-fledged Islamic banks in Bangladesh saw increases in both outstanding loans and deposits, despite six of them grappling with a severe liquidity crisis for over a year. Outstanding loans rose by Tk 6,452 crore to Tk 455,525 crore, while deposits increased by Tk 4,762 crore to Tk 380,066 crore, according to Bangladesh Bank data.
The six struggling banks—Islami Bank Bangladesh, Social Islami Bank, First Security Islami Bank, Union Bank, Global Islami Bank, and ICB Islamic Bank—have been marred by significant loan irregularities, impacting their liquidity and corporate governance. Conversely, Al Arafah Islami Bank, Standard Bank, Exim Bank, and Shahjalal Islami Bank are performing comparatively better.
Experts attribute the rise in loans and deposits to accrued interest and continued loan disbursements, even from the troubled banks. These banks are also facing deficits in their cash reserve ratio and statutory liquidity ratio, with some relying on liquidity support from the central bank.
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