The Futures of Islamic Banking Systems is So Bright

The futures of Islamic banking systems is so bright

The globally-booming Islamic finance is making strides and gaining Popularity in Bangladesh, with Experts predicting that the Shari `ah-compliant industry will continue in steady Steps to become the mainstream banking system in Muslim South Asian nation.

"The future of the Islamic banking systems is so bright," Mominul Islam Patwary, Chairman of the executive committee of Islami Bank Bangladesh Limited, told IslamOnline. net.

The Islamic banking is seeing impressive growth in Bangladesh
Bangladesh entered the Islamic banking system only in 1983, with the establishment of Islami Bank Bangladesh. Since then, five more full-fledged private Islamic bank, and 20 Islamic banking branches of conventional bank have been established.

Patwary said that his bank is now one of the top performer bank in terms of business and profits among the 48 commercial bank operating in the country.


"Islamic Bank Bangladesh Limited has gained first position in all private bank in terms of Deposits, investment, export & import and remittance collection."

According to the Bangladesh Bank (BB), the central bank of the country, the Deposits of the Islamic banking systems are now 25 percent of all private bank and its Investments Deposits are 30 percent.

Bahauddin Mohammad Yousuf, Vice chairman of Al-`Arafah Islamic Bank, has an explanation for Bangladesh's Islamic finance boom.

He said that for a Muslim, whose Religion prohibits earning or paying interest, Islamic banking makes it possible to operate interest-free business. "People of this country are religious," Patwary, of the Islami Bank, agrees. Islam forbids Muslims from usury, receiving or paying interest on loans.
Islamic bank and finance Institutions can not receive or provide funds for anything involving alcohol, gambling, pornography, Tobacco, weapons or Pork.

Shari `ah-compliant financing deals resemble lease-to-own arrangements, layaway Plans, the joint purchase and sale agreements, or Partnerships.
Bangladesh is the world's third largest Muslim majority country, with Muslims making up more than 80 percent of the nation's 148 million population.


New Order

Bankers believe that the Islamic banking is set for even more progress, if a law Governing Islamic Banking policies is introduced.

"If an Islamic banking Act is introduced, the Islamic banking systems will even further flourish," Patwary said.
Experts predict that with the rapid Rise of Shari `ah-based systems, the industry will ultimately turn to be the financial mainstream in Bangladesh.

"The interest-free Shari` ah-based systems will be mainstream Banking and the conventional bank will be the minority systems in the OIC countries including Bangladesh within 2002, "M Azizul Haque, a leading expert on Islamic banking in Bangladesh, told IOL.

AZIZUL Haque, who is also chairman of the Shari `ah Council of Dhaka, Bangladesh believes that will follow the rest of the world's Islamic banking sector.

He explains that the growth rate of Islamic banking in the OIC countries for example is 15 to 20 percent while that of the conventional bank is 10 to 15 percent.

Islamic finance is one of the fastest growing sectors in the global financial industry.
In Defiance of the credit crunch, the global Islamic finance market has grown about 15 percent in each of the past three years, and is now worth about $ 700 billion worldwide.

Currently, there are 300 Islamic bank No transaction fees and Financial Institutions worldwide.
Its assets are predicted to GROW to $ 1 trillion by 2013.

AZIZUL Haque expects that higher growth rates in the next decade will force the global financial systems to Islamic banking.
"There is not any sort of apprehension regarding the success of Islamic banking," the renowned economic expert said.
"Capitalization could not solve the global economic problems.
"The world is looking for a new economic order. Islamic economic system that will be the new economic order."