Bangladesh Bank Assures Protection for Governance in Islamic Banking

PNN News Desk, Dhaka

Bangladesh Bank Governor Md. Mostakur Rahman has emphasized the importance of promoting governance and Shariah compliance in the country’s Islamic banking sector. He stated that members of Shariah boards will receive full protection from the central bank to perform their duties independently and without fear.

Speaking at a discussion titled “Current Situation, Challenges, and Future Directions of Islamic Banking” held at Bangladesh Bank headquarters in Dhaka, the governor highlighted past issues, acknowledging that insufficient oversight had allowed irregularities and even money laundering incidents in some Islamic banking institutions. However, he noted that a proper asset-based structure makes Islamic banking comparatively less risky.

He stressed the importance of strengthening Shariah boards to tackle current challenges. Participants, including scholars, Shariah experts, and academics, proposed several initiatives, such as:

• Drafting a separate Islamic Banking Law
• Creating an independent oversight structure within the central bank
• Requiring approval from multiple Shariah members for large investments
• Ensuring Shariah boards remain free from management influence
• Providing minimum knowledge of Islamic banking to bank officials
• Regular external Shariah audits and transparent compliance systems

Speakers emphasized that to restore public trust in the sector, strict punishment for money laundering and major irregularities is essential. They also recommended providing liquidity support to banks in crisis under easy terms.

Proposals were also made to establish research institutions and well-stocked libraries to make Bangladesh a regional center for Islamic banking. Additionally, participants urged gradual transformation of conventional banking systems into Islamic frameworks.

In his closing remarks, the governor emphasized the need to keep Islamic banks free from political influence, transforming them into service-oriented and accountable institutions. Senior officials of the central bank and members of Shariah boards from various Islamic banks were present at the meeting.