Dhaka, Sep 12 (V7N) – The growth of Islamic banking deposits in Bangladesh is slowing, with the share of Islamic banking in total deposits decreasing despite overall sector expansion, according to data from Bangladesh Bank.

Some conventional banks that had converted to Islamic banks initially boosted the sector’s deposits. However, that trend has declined in recent years. The deposits of full-fledged Islamic banks have fallen by more than 1 percent over the past year, largely due to distress in certain institutions.

Still, the expansion of Islamic banking branches and wings has contributed to an overall growth of more than 2.5 percent in total Islamic banking deposits. At the end of June 2025, the total deposits of the banking sector stood at Tk 20.21 lakh crore, of which Islamic banking accounted for Tk 4.52 lakh crore, or 22.37 percent of total deposits.

By comparison, at the end of June 2024, total deposits were Tk 18.71 lakh crore, with Tk 4.20 lakh crore in Islamic banking deposits, representing 23.54 percent of total deposits.

The decline comes in the wake of fraud revelations in several government-supported Islamic banks in 2022, which triggered panic withdrawals. To stabilize the sector, the central bank has initiated the merger of five distressed Islamic banks into a state-owned Sharia-compliant bank.

END/SMA/AJ