Islamic banking in Bangladesh continued its steady growth trajectory as of May this year, driven by consistent increases in deposits, investments and remittances.

According to the Islamic Banking and Finance Statistics (IBFS) report by the Bangladesh Bank for that month, several key indicators displayed an upward trend.

Islamic banking deposits saw a steady rise from November 2023 to May 2024. The total deposits peaked in May at Tk 428,802 crore, reflecting a modest increase of Tk 4,201 crore (1 percent) from the previous month.

Investments within the Islamic banking sector also exhibited a strong upward trajectory, with the total sum increasing by 1.21 percent month-on-month to reach Tk 504,113 crore in May.

This growth of Tk 6,015 crore highlights the sector's expanding role in financing, underpinned by a surge in demand for Islamic financing products.

However, the assets of Islamic banks in Bangladesh presented a mixed picture over the period, with fluctuations observed from November 2023 to May 2024, according to the IBFS.

After experiencing a decline in the early months, assets hit their lowest in January before rebounding and reaching a peak of Tk 811,365 crore in May, up 1.71 percent from April.

Trade finance through Islamic banking also saw marginal growth. Export receipts remained largely stagnant with minor variations across the six months. In May, export receipts were recorded at Tk 8,089 crore, indicating a 5.76 percent rise from April.

Similarly, import payments saw a 2.99 percent increase, totalling Tk 13,622 crore in May. These figures reflect the slow-moving nature of Islamic banking's involvement in trade finance.

Wage earners' remittances through Islamic banks posted a notable increase, rising to Tk 10,634 crore in May, up by 18.34 percent from the previous month.

The significant jump in remittances highlights the appeal of Sharia-compliant channels for expatriates.

Agent banking deposits within the Islamic banking sector also trended upwards, increasing by 1.34 percent from April to reach Tk 20,624 crore in May.