Deposits at Bangladesh’s 10 full-fledged Islamic banks declined by Tk 27.68 billion (Tk 2,768 crore) in May, ending several months of steady growth, amid uncertainty surrounding the appointment of the chairman of Islami Bank Bangladesh PLC.

According to the latest data from Bangladesh Bank, total deposits at the country’s full-fledged Islamic banks fell to Tk 4.06 trillion (Tk 406,141 crore) at the end of May from Tk 4.09 trillion (Tk 408,910 crore) a month earlier.

Banking sector insiders said the decline was driven by customers withdrawing part of their deposits following controversy and uncertainty over the appointment of the chairman of Islami Bank Bangladesh PLC.

The central bank’s report, however, showed that the overall Islamic banking system including Islamic branches and Islamic windows operated by conventional banks experienced a much smaller decline. Total deposits in the broader Islamic banking network slipped by Tk 7.58 billion (Tk 758 crore), from Tk 4.81 trillion (Tk 480,800 crore) in April to Tk 4.80 trillion (Tk 480,041 crore) at the end of May.

Industry insiders said deposit growth at Islamic branches and windows of conventional banks helped offset much of the decline recorded by full-fledged Islamic banks.

They noted that customer confidence in Islamic banks had been recovering since reforms began in the banking sector after August 5, 2024, with deposits rising steadily through April. That trend was interrupted in May due to uncertainty surrounding the leadership change at Islami Bank Bangladesh PLC.

According to Bangladesh Bank, remittance inflows through the Islamic banking system increased during the month. Remittances rose to $650 million in May from $620 million in April.

Meanwhile, import payments through the Islamic banking system declined sharply. Import bills settled through Islamic banks fell to $890 million in May from $1.23 billion in April, the central bank data showed.