Description

Over the years, Islamic banking has been spreading its wings in various dimensions. But, it was not until the financial crisis of 2008 in the west that people began to realize the potential of this asset-based mechanism. The asset backed nature of lending followed by the strong religious beliefs garnered much popularity for this segment. In Bangladesh Islamic banking emerged in the early eighties and has indeed occupied a significant portion of the market. With only one-tenth branches, this sector is managing one fourth funds of the market. Moreover, the recent trend and performance of the sector is indicating a better position of the Islamic banks in comparison to the conventional ones. Our cover story attempts to portray a clear picture of the Islamic banking mechanism in Bangladesh shedding light on various aspects including the industry status, participants views, and differences from the conventional banks.