Governor of Bangladesh Bank Md Mostakur Rahman has urged the members of the Shariah Board to work independently to strengthen good governance and Shariah compliance in the Islamic banking sector in the country.
He said that the central bank will provide full protection so that the Shariah Board can perform its duties fearlessly.
He said these at a view-sharing meeting titled "Current Situation, Challenges and Future Steps in Islamic Banking" held at the Bangladesh Bank head office on Tuesday (April 7, 2026).
The meeting was attended by the deputy governor, executive director, directors and officers of the islamic banking regulations and policy department of Bangladesh Bank, as well as members of the newly formed Bangladesh Bank Shariah Advisory Board, chairmen and members of the Shariah Boards of almost all Islamic banks in the country.
The governor said that in the past, there have been incidents of money laundering in some institutions of the Islamic banking sector. One of the reasons for this was the lack of proper supervision.
He said that Islamic banking is supposed to be mainly run on a product-based or asset-backed structure. If this structure is implemented properly, the possibility of major losses should be low. But in reality, losses have occurred in some cases, which is a matter of in-depth review.
The Governor also said that it is important to empower the Shariah Board to strengthen the Islamic banking system. Their decisions and guidelines should be given utmost importance. Through this, it will be possible to ensure effective supervision.
The scholars, ulama and Shariah experts who participated in the meeting put forward various proposals to strengthen good governance and Shariah compliance in the Islamic banking sector. Notable among their proposals was:
- Ensuring the three basic principles of Islamic banking—interest-free system, fraud-free transactions, and profit-loss risk sharing.
- Strengthening the Shariah Supervisory Committee, Shariah Secretariat and Shariah Audit System of the banks.
- Giving the Shariah Supervisory Committee the legal authority to work independently, free from the influence of the Board of Directors.
- Making the consent of at least three members of the Shariah Committee mandatory for approving large investments.
- Formulating a separate 'Islamic Banking Law' for the Islamic banking sector.
- Appointing a separate Deputy Governor and Executive Director for the supervision of Islamic banking in Bangladesh Bank.
- Introducing Shariah Compliance Rating to determine the level of Shariah compliance.
- Introducing external Shariah audits at least once a year.
- Making arrangements for the use of a separate core banking system for Islamic banks.
In addition, the speakers called for introducing sufficient Shariah-compliant financial instruments for Islamic banking, strengthening the Islamic money market and formulating effective policies for the rapid recovery of defaulted investments.
They also said that it is necessary to introduce quality training for the members of the board of directors, members of the Shariah Board and executive officers of the bank.
At the same time, they called for the inclusion of skilled scholars from Alia and Qawmi Madrasas in the research and compliance department of Islamic banking through special training.
It was also proposed to organize Shariah and Islamic banking literacy programs and seminars to increase awareness about Islamic banking among the public.