The Shariah-compliant banking sector in Bangladesh maintained a steady operational trajectory across key metrics, including deposit mobilization, asset accumulation, and secondary financial indicators during March 2026. According to the latest statistical disclosure from Bangladesh Bank (BB), the sector is displaying consistent signs of stabilization, recovering gradually from recent market-wide challenges.
Table of Contents
Depositor Behaviour and Systemic Rebalancing
The aggregate deposit base of Islamic banks reached Tk 4.79 trillion in March 2026, representing a marginal month-on-month growth from the Tk 4.76 trillion recorded in February 2026. On a year-on-year basis, deposits expanded by 9.22 per cent against the Tk 4.39 trillion reported in March 2025, signaling a restoration of consumer confidence.
Concurrently, conventional banking institutions experienced a more rapid expansion. The volume of deposits within conventional entities climbed to Tk 17.04 trillion in March 2026 from Tk 15.12 trillion a year prior, translating to a 12.72 per cent annual increase. This comparative acceleration points to an ongoing shift in depositor behavior across the national banking apparatus. Within the Islamic banking framework, Mudaraba-based structures remained the dominant vehicle, securing approximately 86.61 per cent of total deposits, while private sector clients generated 90.48 per cent of the aggregate deposit volume.
Key Financial Trajectories of the Islamic Banking Sector
The performance shifts across primary financial divisions, trade channels, and human resource allocations are detailed in the table below:
| Performance Metric | March 2025 | February 2026 | March 2026 | Monthly Variance (%) | Annual Variance (%) |
| Aggregate Deposits | Tk 4.39 trn | Tk 4.76 trn | Tk 4.79 trn | +0.63% | +9.22% |
| Total Assets | Tk 8.93 trn | Tk 9.34 trn | Tk 9.46 trn | +1.26% | +5.95% |
| Total Investments | Tk 5.53 trn | Tk 5.88 trn | Tk 5.91 trn | +0.51% | +6.85% |
| Agent Banking Deposits | Tk 221 bn | Tk 269 bn | Tk 272 bn | +1.12% | +22.96% |
| Inbound Remittances | USD 723 m* | USD 661 m | USD 701 m | +6.02% | -3.09% |
| Export Receipts | USD 742 m | USD 604 m | USD 617 m | +2.11% | -16.94% |
| Import Outlays | USD 1,164 m* | USD 852 m* | USD 870 m | +2.16% | -25.28% |
* Statistical values derived mathematically from verified year-on-year percentage variations.
Financing Allocation and Asset Portfolios
Total investments extended by Islamic banks observed flat monthly progress, closing at Tk 5.91 trillion in March 2026 compared to Tk 5.88 trillion in February. Viewed annually, overall credit financing increased by 6.85 per cent from the Tk 5.53 trillion documented in March 2025.
The underlying investment portfolios remained highly concentrated within a limited selection of financing instruments. The Bai-Murabaha modality commanded the highest share at 44.20 per cent, followed by Hire Purchase under Shirkatul Melk (HPSM) at 17.34 per cent, and Bai-Muajjal at 17.26 per cent. Sectoral exposure remained predominantly focused on industrial production along with trade and commercial ventures. In terms of absolute size, the total assets of Islamic banks increased by 1.26 per cent over the month to reach Tk 9.46 trillion in March 2026, up from Tk 9.34 trillion in February, and up 5.95 per cent from the Tk 8.93 trillion calculated in March 2025.
Trade Processing, Agent Banking, and Human Capital
The sector’s involvement in external trade and retail channels produced mixed operational outcomes:
Export Operations: Export receipts managed by Shariah-compliant institutions rose by 2.11 per cent month-on-month to USD 617 million in March 2026, yet dropped by 16.94 per cent compared to the USD 742 million recorded in March 2025.
Import Operations: Import payments stood at USD 870 million, up 2.16 per cent from February but registering a steep 25.28 per cent contraction relative to the previous year’s figures.
Remittance Inflows: Foreign remittance channels routed USD 701 million into the country in March 2026, representing a 6.02 per cent improvement over February’s USD 661 million, though down 3.09 per cent on an annual basis.
The agent banking division continued to show strong momentum, with deposits growing to Tk 272 billion in March 2026 from Tk 269 billion in February. This represents a 22.96 per cent year-on-year surge from Tk 221 billion, meaning Islamic banks now command a dominant 53.75 per cent share of all nationwide agent banking deposits. Concurrently, the number of specialized Islamic banking personnel dropped slightly to 580 in March 2026 from 582 in February, but remained 3.94 per cent higher than the 558 employees recorded in March 2025.
Strategic Observations and Risk Management
Financial experts indicate that while steady deposit growth confirms a sustained appetite for Shariah-compliant banking services, the deceleration in investment and international trade velocity shows that banks are adopting a highly conservative stance in response to macroeconomic uncertainties.
Masrur Reaz, Chairman of Policy Exchange Bangladesh, explained that while the latest central bank data confirms basic operational resilience, long-term market trust depends heavily on governance changes:
He further noted that the slower growth trajectory seen in investments and external trade processing indicates that these institutions are prioritizing risk aversion amid broader macroeconomic fluidity. He concluded that the sector must implement institutional reforms and improve risk-mitigation frameworks to maintain growth and compete effectively with conventional banking institutions.