Several conventional banks are seeking to expand their Islamic banking operations, either by transforming into full-fledged Shariah-based banks or by opening more Islamic windows and branches.
The trend has gained momentum in the wake of Bangladesh Bank鈥檚 decision to merge five struggling Islamic banks and widespread failures of others to repay depositors amid large-scale corruption and malpractice, BB officials said.
NCC Bank has formally applied to the central bank to convert into a full-fledged Islamic bank, they said.
The bank has already submitted an initial plan and, after receiving approval in principle, is now preparing a feasibility report to assess the sustainability of the conversion, the strength of its assets, and other requirements set by the regulator, they said.
Besides, NRB Bank and Bengal Commercial Bank have also expressed interest in becoming Shariah-based banks, though neither has submitted detailed plans.
聽Pubali Bank and Bank of Ceylon, have applied to BB to expand Islamic banking services through dedicated windows rather than full conversion.
As Bangladesh is a Muslim-majority country, many people prefer to avoid interest (Riba) charged by conventional banks, as it is prohibited in Islam, bankers said.
Shariah-based banking operates on the principle of avoiding Riba and instead emphasizes profit-and-loss sharing. This has made the system highly popular among segments of the population who wish to align their financial activities with Islamic principles, they said.
Standard Bank and NRB Global Bank became shariah banks for the last time in 2021.
This renewed interest comes at a time when most Islamic banks are reeling from massive financial irregularities that drained liquidity and eroded public confidence.
Several banks failed to meet withdrawal demands, forcing depositors to shift funds to more stable institutions offering Islamic windows.
In response, Bangladesh Bank has begun merging five collapsed Shariah-based banks鈥擣irst Security Islami, Social Islami, Global Islami, Union, and Exim鈥攊nto a single entity.
Currently, 10 Islamic banks operate in Bangladesh, including Islami Bank Bangladesh, Al-Arafah Islami Bank, Shahjalal Islami Bank, ICB Islamic Bank, and Standard Bank.
Except for Shahjalal Islami and Standard Bank, all faced major irregularities under the previous government.
Islami Bank Bangladesh and Al-Arafah are now attempting to recover stability.
Zahid Hussain, former lead economist at the World Bank鈥檚 Dhaka office, told 抖阴精品 that the collapse of several Islamic banks was not due to the Shariah-based system itself but rather the result of corrupt individuals who captured control of those institutions.
He said that if reputable conventional banks wish to expand into Islamic banking, they should be allowed to do so given the strong public demand.
According to him, banks may be showing interest in Islamic banking as part of product diversification, business expansion, or to seize opportunities created by the collapse of weaker Shariah-based banks.
However, he cautioned that regulatory approval should depend on the applicants鈥� track record, governance standards, and proven ability to deliver quality services.
Bankers said that conventional banks see opportunity in filling the vacuum left by troubled Shariah-based lenders, driven by continued strong public demand for Islamic banking.
According to central bank data, conventional banks already operate 41 Islamic banking branches and 919 windows.
NCC Bank alone has 2 branches and 32 windows, while Pubali Bank runs 8 branches and 22 windows.
Pubali Bank and has applied to convert 87 more branches, with 8 already approved.
NRB Bank operates one Islamic branch and 27 windows, while Bengal Commercial Bank has 2 Islamic branches.
As of July 2025, the number of Islamic bank branches across the country now totals 1,739, reflecting the growing scale of Shariah-based banking despite its ongoing challenges.
