The Islamic banking sector in Bangladesh demonstrated a steady trajectory across deposits, assets, and key financial indicators in March 2026, according to official data released by Bangladesh Bank (BB). The statistical findings indicate a gradual stabilisation within the Shariah-based banking sector following a recent period of market turbulence.
Deposit Growth and Market Dynamics
Total deposits held by Islamic banks rose to Tk 4.79 trillion in March 2026, marking a month-on-month increase from the Tk 4.76 trillion recorded in February 2026. On a year-on-year basis, deposits grew by 9.22 per cent compared to the Tk 4.39 trillion logged in March 2025.
In comparison, conventional banks experienced a more pronounced expansion. The volume of deposits in conventional financial institutions increased by 12.72 per cent annually, climbing to Tk 17.04 trillion in March 2026 from Tk 15.12 trillion in March 2025. This variance highlights a relative shift in depositor behaviour across the broader domestic banking system. Within the Islamic banking framework, Mudaraba-based deposits remained the primary mechanism, accounting for approximately 86.61 per cent of aggregate deposits, whilst private sector contributors constituted 90.48 per cent of the overall deposit base.
Comparative Financial Metrics of Islamic Banks
The following table outlines the monthly and annual performance variations across the key financial indicators of the Islamic banking sector:
| Financial Indicator | March 2025 | February 2026 | March 2026 | Month-on-Month Change (%) | Year-on-Year Change (%) |
| Total Deposits | Tk 4.39 trn | Tk 4.76 trn | Tk 4.79 trn | +0.63% | +9.22% |
| Total Investments | Tk 5.53 trn | Tk 5.88 trn | Tk 5.91 trn | +0.51% | +6.85% |
| Total Assets | Tk 8.93 trn | Tk 9.34 trn | Tk 9.46 trn | +1.26% | +5.95% |
| Agent Banking Deposits | Tk 221 bn | Tk 269 bn | Tk 272 bn | +1.12% | +22.96% |
| Export Receipts | USD 742 m | USD 604 m | USD 617 m | +2.11% | -16.94% |
| Import Payments | USD 1,164 m* | USD 852 m* | USD 870 m | +2.16% | -25.28% |
| Remittance Inflows | USD 723 m* | USD 661 m | USD 701 m | +6.02% | -3.09% |
* Derived from the stated percentage variances in the official central bank report.
Investment Portfolios and Total Assets
Total investments by Islamic institutions remained broadly stable, moving to Tk 5.91 trillion in March 2026 from Tk 5.88 trillion in the prior month. This represents a year-on-year increase of 6.85 per cent from the Tk 5.53 trillion recorded in March 2025.
The investment portfolios of these banks exhibited a continued reliance on a restricted selection of financing structures. The Bai-Murabaha mode commanded the largest 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 heavily directed towards industrial operations alongside trade and commerce. Concurrently, the total assets of Islamic banks grew by 1.26 per cent month-on-month to reach Tk 9.46 trillion in March 2026, up from Tk 9.34 trillion in February 2026, reflecting an annual growth of 5.95 per cent from Tk 8.93 trillion.
Mixed Trends in External Trade and Human Resources
External trade indicators presented contrasting short-term and long-term trends:
Export Receipts: Shariah-based banks handled USD 617 million in export receipts in March 2026, representing a 2.11 per cent monthly lift from USD 604 million in February, but a year-on-year drop of 16.94 per cent from USD 742 million.
Import Payments: Import transactions processed through these institutions stood at USD 870 million, reflecting a monthly rise of 2.16 per cent but a substantial annual contraction of 25.28 per cent.
Remittance Inflows: Remittances rose by 6.02 per cent month-on-month to USD 701 million in March 2026, though this figure was 3.09 per cent lower than the level recorded in March 2025.
In the agent banking segment, Islamic options generated Tk 272 billion in deposits in March 2026, up from Tk 269 billion in February. This constitutes a 22.96 per cent year-on-year escalation from Tk 221 billion, cementing the sector’s control over 53.75 per cent of total agent banking deposits nationwide. Conversely, the number of specialised Islamic banking employees was registered at 580 in March 2026, down slightly from 582 in February, but representing a 3.94 per cent increase against the 558 employees recorded in March 2025.
Expert Analysis and Regulatory Outlook
Financial analysts noted that while the growth in deposits points to structural resilience and an ongoing consumer appetite for Shariah-compliant services, the decelerating pace of investments and international trade indicators reflects a pronounced caution driven by broader macroeconomic uncertainties.
Masrur Reaz, Chairman of Policy Exchange Bangladesh, observed that while the sector shows distinct signs of stabilisation following a demanding period, sustaining this momentum will depend on clear institutional adjustments:
“Islamic banks in Bangladesh are showing signs of stabilisation after a difficult period, but restoring long-term confidence will depend on stronger governance, transparency and regulatory oversight. The latest data suggest the sector remains resilient, particularly in deposits, agent banking and Shariah-based financing demand.”
He further noted that the slower pace of trade transactions and investments demonstrates that these institutions are operating with a high degree of prudence given current market challenges. He concluded that the sector must implement deeper structural reforms and enhanced risk management policies to preserve its growth trajectory and compete efficiently with conventional banks.