Bangladesh Bank (BB) on Saturday stepped up its push to strengthen governance and Shariah oversight in Islamic banking, as the central bank finalises a dedicated Islamic Banking Act aimed at reinforcing regulation, transparency and public confidence in the fast-growing sector.
Speaking at a workshop jointly organised by the Bangladesh Institute of Bank Management (BIBM) and Bangladesh Bank’s Islamic Banks Regulation and Policy Department (IBRPD), Governor Md Mostaqur Rahman said strengthening governance remains the central bank’s highest priority to restore confidence in the banking system and insulate it from political influence.
A large proportion of depositors prefer Islamic banking services, making a more proactive and effective role for Shariah councils essential to safeguarding public trust, he said. The governor also expressed confidence that Bangla QR would gain widespread nationwide adoption over the coming year, further accelerating digital financial transactions.
The workshop, titled Discussion on Shariah Roles of Chairman of Board of Directors in Islamic Banking Operations, focused on strengthening governance and ensuring effective Shariah compliance across the country’s Islamic banking industry.
Bangladesh Bank Deputy Governor Md Kabir Ahmed said the central bank’s new regulatory framework assigns broader responsibilities to Shariah compliance functions while significantly strengthening institutional mechanisms for oversight.
The growing popularity of Islamic banking has made robust Shariah governance indispensable for the sector’s sustainable development, he said.
IBRPD Executive Director Md Ashraful Alam said drafting of the Islamic Banking Act is in its final stage. The proposed law is expected to strengthen the regulatory framework while improving transparency, efficiency and accountability in Islamic banking operations, he added.
Bangladesh Association of Banks Chairman Abdul Hai Sarker said Bangladesh has comparatively more banks than many neighbouring countries, arguing that a more rational number of banks would improve management, supervision and operational efficiency across the industry.
BIBM Director General Md Ezazul Islam said the rapid expansion of Islamic banking requires stronger Shariah governance and more effective compliance mechanisms. Adherence to Shariah principles not only enhances customer confidence but also supports the industry’s stability, transparency and long-term growth, he said.
He also called for closer coordination among bank boards, management and Shariah supervisory functions to build an internationally competitive Islamic banking system, reaffirming BIBM’s commitment to supporting the sector through research, professional training and knowledge sharing.
The workshop featured three technical presentations by members of Bangladesh Bank’s Shariah Advisory Board on the application of Islamic legal maxims in banking and finance, the Shariah Governance Framework and its implications for Islamic banking operations in Bangladesh, and the Shariah responsibilities of board chairmen.
Directors of Islamic banks, senior Bangladesh Bank officials, representatives of scheduled banks and financial institutions, academics, researchers and banking professionals also participated in an open discussion on strengthening governance, Shariah oversight and the future development of Islamic banking in Bangladesh.
