Bangladesh Bank to form ‘Shariah Advisory Board’ for Islami Banking

Bangladesh Bank logo. Wikimedia Commons

Dhaka, October 17 - Bangladesh Bank has initiated measures to ensure good governance, transparency, and the proper application of Shariah principles in the Islamic banking sector.

In this regard, the central bank has recently approved a policy for the formation of its own Shariah Advisory Board (SAB), a senior official confirmed this on Thursday.

The policy, titled "Bangladesh Bank's Policy on the Formation, Appointment-Removal of Members, and Responsibilities of the Shariah Advisory Board (SAB)-2025," was formally approved during the 444th meeting of the central bank's Board of Directors.

Bangladesh is following the lead of many central banks worldwide, including those in Malaysia, Bahrain, Oman, Pakistan, Indonesia, Iran, Kuwait, and the UAE, which already have dedicated Shariah Advisory Councils or Boards.

The formation of a skilled SAB is considered essential to make Islamic Banking activities in Bangladesh more dynamic, robust, and contemporary, said the official.

Bangladesh Bank stated that the Board will play a crucial role in resolving ‘doubtful matters' concerning Islamic banks, financial institutions, and Shariah-based finance-related industries.

Besides, the SAB will also work on setting industry standards, conducting shariah vetting of new products, and providing necessary resolutions and guidance.

Furthermore, Article 16 of the 'Bank Resolution Ordinance 2025' explicitly empowers the central bank to establish its own Shariah Board to advise on the resolutions of Islamic banks. - UNB