B Mirror Report: Bangladesh’s Islamic banking sector recorded steady growth in deposits, assets, and key financial indicators in March 2026, according to Bangladesh Bank (BB) data, even as investment and trade-related activities showed mixed performance.
Total deposits in Islamic banks rose to Tk 4.79 trillion in March 2026, up from Tk 4.76 trillion in February. On a year-on-year basis, deposits increased by 9.22 percent compared to Tk 4.39 trillion in March 2025, reflecting gradual stabilisation in the sector following recent volatility.
However, conventional banks saw faster deposit growth, reaching Tk 17.04 trillion in March 2026 from Tk 15.12 trillion a year earlier, a 12.72 percent increase. This indicates a relative shift in depositor preference across the banking system.
Islamic banks continue to rely heavily on Mudaraba-based deposits, which account for around 86.61 percent of total deposits, while the private sector contributes approximately 90.48 percent of their deposit base.
Investment by Islamic banks remained broadly stable at Tk 5.91 trillion in March 2026, slightly higher than Tk 5.88 trillion in February. On a yearly basis, investments increased by 6.85 percent from Tk 5.53 trillion in March 2025.
Investment portfolios remain concentrated in Bai-Murabaha (44.20 percent), followed by HPSM (17.34 percent) and Bai-Muajjal (17.26 percent), indicating continued reliance on a limited range of financing structures. Sectoral exposure remains focused on industry and trade and commerce.
Total assets also rose to Tk 9.46 trillion in March 2026, up from Tk 9.34 trillion in February, reflecting a monthly growth of 1.26 percent. Year-on-year, assets increased by 5.95 percent.
External trade-related indicators showed mixed performance. Export receipts handled by Islamic banks increased to USD 617 million in March 2026 from USD 604 million in February, a 2.11 percent monthly rise. However, exports declined by 16.94 percent compared to March 2025.
Import payments rose to USD 870 million in March 2026, up 2.16 percent month-on-month, but fell 25.28 percent year-on-year.
Remittance inflows also increased to USD 701 million in March from USD 661 million in February, marking a 6.02 percent monthly rise. However, they declined by 3.09 percent compared to the same period last year.
In agent banking, Islamic banks reported deposits of Tk 272 billion in March 2026, up from Tk 269 billion in February. On a yearly basis, deposits rose 22.96 percent from Tk 221 billion in March 2025. Islamic banks accounted for 53.75 percent of total agent banking deposits.
The number of specialised Islamic banking employees stood at 580 in March 2026, slightly down from 582 in February, but up 3.94 percent year-on-year.
Experts said the sector is showing signs of stabilisation, supported by steady deposit growth and continued demand for Shariah-based banking services. However, they cautioned that slower growth in investments and external transactions suggests a cautious approach amid broader economic uncertainty.
Islamic banking expert Masrur Reaz, chairman of Policy Exchange Bangladesh, said the sector has demonstrated resilience, particularly in deposits and agent banking, but requires stronger governance and transparency to sustain long-term growth.
He added that improving risk management and institutional reforms would be essential for Islamic banks to remain competitive with conventional banking institutions.
