Islamic Bank deposits surge as public confidence returns

After years of irregularities and financial mismanagement, public confidence in Bangladesh’s banking sector is gradually returning. Notably, deposits in the Islamic banking sector have seen significant growth, reflecting renewed trust among customers.

According to the latest data from Bangladesh Bank, deposits in the Islamic banking system increased by Tk 41,777 crore over the past year.

During the previous Awami League government’s tenure, widespread irregularities and money laundering caused severe damage to the banking sector. Several Islamic banks faced acute liquidity crises, forcing the government to merge five banks to stabilise the sector. This seriously shook public confidence in the banking system.

However, following a change in government, the interim administration initiated banking sector reforms, gradually restoring trust. As a result, cash previously kept outside the banking system is now returning to banks.

Bangladesh Bank’s data shows that in October 2025, deposits in 10 full-fledged Islamic banks, along with Islamic branches and windows of conventional banks, stood at Tk 467,428 crore. By November, this increased to Tk 476,927 crore, marking a monthly growth of Tk 9,499 crore, or 2.03%.

Compared to November 2024, deposits in the Islamic banking system in November 2025 increased by Tk 41,777 crore, equivalent to a growth of 9.60%.

Bankers note that earlier issues had eroded public confidence, but this is now being restored. Confidence is returning not only in Islamic banks but across the entire sector, largely due to timely measures by Bangladesh Bank.

In the past year alone, deposits in Islamic banks in Bangladesh have grown by nearly Tk 25,000 crore. The consolidation of troubled banks has restored good governance, encouraging cash held outside banks to return to the system.

According to data, deposits in the 10 full-fledged Islamic banks stood at Tk 401,472 crore at the end of October 2025, rising to Tk 403,840 crore in November, reflecting a monthly increase of Tk 2,268 crore.

Meanwhile, remittance inflows via Islamic banking channels have also increased. In October, inflows from expatriates were $69 million, rising to $74 million in November. However, exports through the same channel decreased by $9 million over the same period.

Bangladesh Bank Executive Director and spokesperson Arif Hossain Khan said, “Due to past problems, people were hesitant to deposit money in some Islamic banks. After the merger of five banks into the ‘Sammilito Islami Bank PLC’, that fear has disappeared. Public confidence has returned, and deposits are increasing. The central bank continues to work to sustain this positive trend.”