Islamic banking (IB) and financial institutions sector in Bangladesh were subject to irregularities and undue influences over the past several years, causing its present sorry state.
Islamic banks, which once remained in a strong position in the country, have now landed in a worse situation due to such vicious acts, former Managing Director (MD) of Islami Bank Bangladesh PLC Mohammad Abdul Mannan observed on Tuesday.
Such mischief, such a ruthless culture of malpractice to destroy the country's Islamic banking sector has never taken place in world history, he told a workshop.
He was addressing as a panelist of a research workshop on “Pricing of Islamic Banking Products in a Dual Banking Environment of Bangladesh” organized by the Bangladesh Institute of Bank Management (BIBM) on Tuesday.
Comparing the willful attack on Buddhist civilization in the subcontinent, Mannan said the country's Islamic banking had been similarly attacked in the last several years.
The top banker, who is now chairman of board of directors of First Security Islami Bank, had been forced to resign from the MD position of the then IBBL at gunpoint in 2017 before S Alam Group took over the control of the bank, the largest Shariah-based bank in the country.
Before January 2017, the excess liquidity of the IBBL was over Tk25,000 crore, he said, indicating the bank's then strong position.
Bangladesh Bank (BB) Deputy Governor and Chairman of BIBM Executive Committee Nurun Nahar inaugurated the workshop as chief guest, joining virtually.
BIBM Director General Dr Md Akhtaruzzaman chaired the program while Managing Director & CEO of Shahjalal Islami Bank Mosleh Uddin Ahmed, and Shariah-based banking expert Dr Md Anwar Hosain Molla were present as panelists.
Addressing the participants, Nahar expressed hope that the Islamic banking sector would turn around soon from the current sorry state.
Referring to the success of such a banking sector, she said that yet many developed countries have been following the model of Islamic banks in Bangladesh.
Highlighting challenges, Anwar Hosain Molla said Islamic banking officials have to work in an internal dual environment inside a conventional bank, in addition to the dual market situation.
'Niat' or intention is important for introducing IB, he said, adding: "However, some banks have introduced Islamic banking only to attract or retain customers."
Although 30% of the banking sector is Shariah-based, the central bank's circulars are solely focused on conventional banking, he said and called for separate circulars on the same issue.
Mosleh Uddin Ahmed said unless every rule and guidelines are prepared by the regulator, Islamic banking cannot flourish fully. Even after 42 years of IB activities in the country, a full-fledged Shariah banking guideline has not been prepared, he added.
Currently, many people believe that IB is fraud, he said, suggesting an external Shariah-based organization to audit a bank to ensure Shariah there.