Dhaka: Lawmakers in Bangladesh are urging the central bank to draft Islamic banking regulations, spurring Standard Chartered Plc to increase investment in the nation's $10 billion (Dh36.7 billion) Sharia-compliant finance industry.
Bangladesh Bank will consider proposals from parliament's finance committee to issue more Sharia banking licences and start an Islamic money market, Jahangir Alam, a central bank spokesman, said in a November 24 interview from the capital Dhaka. The country's seven Islamic lenders, whose assets are growing at 28 per cent a year, now operate under the Bank Company Act and there is only one outstanding Islamic bond, Alam said.
A low profile and the lack of clear rules has deterred global Islamic banks including Kuala Lumpur-based OCBC Al-Amin Bank Bhd from entering Bangladesh, home to the world's fourth-largest Muslim population. Standard Chartered Saadiq plans to start project and trade financing in Bangladesh next year after offering consumer banking in the nation of 159 million people for the past five years.
"As the regulations become clear and transparent, the market will develop faster," Afaq Khan, the Dubai-based chief executive officer of Standard Chartered Saadiq, the Islamic unit which makes most of its profit in Asia, said recently that separate laws "mean there will be more of a focus from the government in expanding the industry and a standardisation of products," he said.
Bangladesh last sold five-year non-Islamic bonds on November 2 at a yield of 8.5 per cent, according to the central bank's website.
The South Asian nation is following Indonesia and Pakistan in drafting separate laws for Sharia-compliant finance.