Bangladesh’s Islamic banking sector posted strong investment growth over the year to April 2025, despite lagging behind conventional banks in deposit mobilisation, central bank data shows.

Investments by Islamic banks rose 11.87% year-on-year to Tk 5.57 trillion in April 2025, up from Tk 4.98 trillion a year earlier. Total assets also increased 14.55% to Tk 9.14 trillion.

However, deposits grew just 3.91% over the same period, reaching Tk 4.41 trillion, compared with a stronger 11.10% growth recorded by conventional banks. As a result, Islamic banks’ share of total deposits fell from 23.66% to 22.47%.

Industry analysts attribute the slowdown partly to depositor withdrawals following governance lapses uncovered after the July uprising.

Across the banking sector, total deposits rose 9.40% to Tk 19.63 trillion, while overall investments climbed 11.36% to Tk 22.30 trillion.

In trade finance, Islamic banks handled $758 million in export proceeds in April 2025, a 9.1% rise year-on-year, but their import payments fell 3.86% to $1.16 billion. Their share of import transactions stood at around 19%.

Remittance inflows to Islamic banks declined sharply from $817 million in April 2024 to $598 million, reducing their market share from about 40% to 22%. Conventional banks saw remittances more than double to $2.15 billion.

In agent banking, Islamic banks maintained a leading position, holding over half of all deposits in April 2025, which rose 13.18% to Tk 230 billion.