Functions, Prospects, and Challenges of Shari’ah-Based Banking: Islami Bank Bangladesh Limited

  • Jashim Uddin AhmedEmail author
  • Hafiza Sultana
  • Mohammad Tayeenul Hoque
Part of the Management for Professionals book series (MANAGPROF)


The case study discusses Islamic banking activities in Bangladesh by focusing on Islami Bank Bangladesh Limited (IBBL), the pioneer in Shari’ah-based banking in the country. Although Islamic banking started with limited resources and a few participants, it has shown strong growth potential with a high level of customer acceptance. The introduction of profit and loss sharing banking system proved its worth since IBBL started rendering banking services with goals for social and economic development in 1983. Therefore, there are significant opportunities for the growth of Islamic banking in the country. Several challenges, on the other hand, are needed to be addressed, for example, inadequate diversification of products, lack of regulatory standard, complexity in investment opportunities, wobbly compliance with the Islamic Shari’ah, and intense competition from conventional banks with Islamic products and service, in order to improve the efficiency of this sector.


Bangladesh Islamic banking Shari’ah banking Profit and loss sharing banking Islami Bank Bangladesh Limited 


  1. Ahmed, J. U., & Ahmed, A. (2018). Agrani Doer Banking: Agent banking business in Bangladesh. Business Perspectives and Research, 6(2), 154–164.CrossRefGoogle Scholar
  2. Ahmed, J. U., Nisha, N., & Rifat, A. (2016). The Dhaka Mercantile Co-operative Bank Limited: A case of Islamic Shari’ah banking in Bangladesh. International Journal of Financial Innovation in Banking, 1(1-2), 62–79.CrossRefGoogle Scholar
  3. AIBL. (2018). Corporate website. Retrieved July 20, 2018, from
  4. Alam, M. N. (2000). Islamic banking in Bangladesh: A case study of IBBL. International Journal of Islamic Financial Services, 1(4), 10–29.Google Scholar
  5. Alamgir, M. (2014). Development of Islamic banking in Bangladesh: Issues and challenges. Thoughts on Banking and Finance, 3(2), 66–91.Google Scholar
  6. Ayub, M. (2007). Understanding Islamic finance. London: Willy-Finance.Google Scholar
  7. (The) Dhaka Tribune. (2018, April 18). Acute liquidity crisis catalyzed shakeup at Islami Bank, by Shariful Islam. Retrieved July 20, 2018, from
  8. EXIM Bank. (2017). Annual Report. Retrieved July 20, 2018, from
  9. Exim Bank. (2018). Corporate website. Accessed July 20, 2018, from
  10. FSIBL. (2018). Corporate website. Accessed July 20, 2018, from
  11. IBBL. (2018a). Corporate website. About Us. Accessed July 20, 2018, from
  12. IBBL. (2018b). Organization structure. Accessed July 20, 2018, from
  13. IBBL Annual Reports, 2013, 2014, 2015, 2016, 2017. IBBL, Dhaka, Bangladesh.Google Scholar
  14. ICBIBL. (2018). Corporate website. Accessed July 20, 2018, from
  15. (The) Khaleej Times. (2016, March 20). Bank aims rural uplift of Bangladesh economy, by Rizvi, M. Accessed December 28, 2017, from
  16. Miah, M. D., & Sharmeen, K. (2015). Relationship between capital, risk and efficiency: A comparative study between Islamic and conventional banks of Bangladesh. International Journal of Islamic and Middle Eastern Finance and Management, 8(2), 203–221.CrossRefGoogle Scholar
  17. Nazim, A., & Bennie, G. (2012, December). World Islamic banking competitiveness report 2012–2013. Ernst & Young.Google Scholar
  18. (The) New Age. (2018, July 5). Country’s Islamic banks lack products to hedge risks, say experts, by Staff Correspondent. Accessed July 20, 2018, from
  19. Pew Forum. (2015, April 2). 10 countries with the largest Muslim populations, 2010 and 2050. Accessed December 28, 2017, from
  20. Siddikee, M. A., Parvin, S., & Hossain, M. S. (2013). Banking scenarios in Bangladesh. Bangladesh Research Publication Journal, 8(1), 89–95.Google Scholar
  21. SIBL. (2017). Annual Report. Retrieved December 8, 2018, from
  22. SJIBL. (2018). Corporate website. Available from
  23. UBL. (2018). Corporate website. Accessed July 20, 2018, from
  24. Ullah, H. (2014). Shari’ah compliance in Islamic banking: An empirical study on selected Islamic banks in Bangladesh. International Journal of Islamic and Middle Eastern Finance and Management, 7(2), 182–199.CrossRefGoogle Scholar
  25. (The) World Fact Book. (2017). Central Intelligence Agency, Bangladesh Country Profile. Available from

Copyright information

© Springer Nature Switzerland AG 2019

Authors and Affiliations

  • Jashim Uddin Ahmed
    • 1
    Email author
  • Hafiza Sultana
    • 2
  • Mohammad Tayeenul Hoque
    • 3
  1. 1.Department of ManagementSchool of Business & Economics North South UniversityDhakaBangladesh
  2. 2.InterResearchDhakaBangladesh
  3. 3.Department of Marketing and International BusinessSchool of Business & Economics, North South UniversityDhakaBangladesh

Personalised recommendations