Eastern Bank Launches Islamic Banking in Bangladesh

In a major development for the financial sector in Bangladesh, Eastern Bank has officially launched its Islamic banking services, marking a significant milestone in its efforts to meet the growing demand for Shariah-compliant financial products. Islamic banking, which adheres to Islamic law (Shariah), is designed to provide financial services that align with ethical principles and avoid activities prohibited in Islam, such as interest-based transactions. Eastern Bank’s Islamic banking services will be available across 20 branches nationwide, with plans to expand further.

This launch reflects the increasing global demand for Islamic banking, which has seen rapid growth in recent years. According to the Islamic Finance Development Report, the global Islamic finance industry is projected to grow to $4.94 trillion by 2025. In Bangladesh, where the majority of the population is Muslim, there is a growing appetite for financial products that align with religious beliefs. Eastern Bank’s decision to introduce Shariah-compliant services reflects this shift, offering a range of ethical financial solutions to its customers.

Eastern Bank Services: A Strategic Ethical Finance

Eastern Bank’s launch of Islamic banking services is part of a broader trend toward ethical finance, both globally and in Bangladesh. As Islamic finance gains popularity worldwide, it has become clear that consumers are increasingly looking for financial products that align with their ethical and religious values. In response, Eastern Bank has introduced a wide range of Shariah-compliant products, including savings accounts, home financing, and business loans, all structured to comply with Islamic principles.

During the launch event, Md Showkat Ali Chowdhury, Chairman of Eastern Bank, emphasized the importance of this new venture. “We are launching Islamic banking operations to meet the growing needs of Shariah-based banking,” Chowdhury said. “Islamic finance is gaining popularity worldwide, and as a modern and dynamic banking services provider, Eastern Bank Services could not ignore this growing demand. We are committed to taking Islamic banking to new heights.”

Chowdhury’s comments highlight the bank’s strategic focus on meeting the evolving needs of its customers. By offering Islamic banking services, Eastern Bank is not only catering to the needs of the Muslim community but also positioning itself as a leader in the ethical finance sector.

Islamic Banking Services Designed for Everyone

One of the key features of Eastern Bank’s new offering is its focus on inclusivity. The bank’s Islamic banking services are designed to cater to a wide range of customers, from individuals seeking Shariah-compliant savings accounts to businesses in need of ethical financing solutions. This approach reflects the bank’s commitment to providing ethical financial services that are accessible to all.

Eastern Bank’s Islamic banking products are structured by Shariah principles, which prohibit activities such as interest-based transactions, speculation (gharar), and investments in haram (forbidden) industries. Instead, the bank’s products are based on equity-based financing models, such as Musharakah (partnership) and Murabaha (cost-plus financing). These models offer ethical alternatives to conventional banking products, making them an attractive option for customers who are looking for financial solutions that align with their religious beliefs.

Ali Reza Iftekhar, Managing Director and CEO of Eastern Bank, emphasized the importance of providing Shariah-compliant services during the launch event. “As a compliant bank, we are fully committed to ensuring that all our Islamic banking operations adhere to Shariah principles,” Iftekhar said. “Our goal is to offer a wide array of Islamic banking products that cater to the varied financial needs of our customers.”

Key Islamic Banking Products

Eastern Bank’s Islamic banking division offers a comprehensive range of products designed for retail, SME, corporate, and trade clients. The bank’s Shariah-compliant products include savings accounts, home financing, business loans, and capital financing solutions. One of the bank’s most innovative offerings is Continuous Musharakah Finance, a unique product designed to meet the capital financing needs of businesses while adhering to Islamic principles.

Musharakah, an equity-based financing model, is based on a partnership between the bank and its clients, where profits and losses are shared. This structure offers an ethical alternative to conventional interest-based loans, making it an attractive option for businesses looking to stay true to Islamic values while meeting their financial needs. By offering products like Continuous Musharakah Finance, Eastern Bank is providing businesses with the tools they need to grow while staying compliant with Shariah law.

In addition to Musharakah, Eastern Bank Services also offers Ijara (leasing), Murabaha (cost-plus sales), and Wadiah (safekeeping) accounts. These products ensure that customers have access to a wide range of financial solutions that meet their personal and business needs, all while staying within the bounds of Islamic law.

Expanding Islamic Banking Across Bangladesh

To ensure the success of its Islamic banking operations, Eastern Bank has established dedicated Islamic banking windows at 20 branches across Bangladesh. In addition to these windows, the bank has also set up designated Islamic banking help desks at other branches, where trained experts in Islamic finance are available to assist customers. This commitment to customer service is a key part of Eastern Bank’s strategy, ensuring that clients receive the support they need to navigate the world of Islamic finance.

The bank’s Shariah Supervisory Committee, chaired by Shahid Rahmani, plays a crucial role in overseeing the compliance of all Islamic banking services. Rahmani expressed his optimism for the future of Islamic banking at Eastern Bank during the launch event. “We are dedicated to ensuring that our Islamic banking services remain fully compliant with Shariah law. There will be no compromise when it comes to following Islamic principles,” Rahmani said, inviting clients to explore the full range of Eastern Bank Services for a seamless and ethical banking experience.

AKM Mizanur Rahman, Deputy Chief of Eastern Bank’s Islamic banking division, further elaborated on the bank’s offerings during a presentation at the launch event. Rahman highlighted the diverse range of products and services available to customers, including retail, SME, and corporate banking solutions. His presentation underscored the bank’s commitment to meeting the specific needs of its customers, whether they are individuals looking for Sharia-compliant savings accounts or businesses seeking ethical financing options.

The Global Rise of Islamic Finance

Eastern Bank’s entry into the Islamic banking sector is part of a broader global trend toward ethical finance. Islamic finance has grown rapidly in recent years, with countries such as the UK, Malaysia, and the UAE emerging as key hubs for the industry. In Bangladesh, the demand for Sharia-compliant products is growing as consumers become more aware of the ethical implications of their financial choices.

According to a report by Thomson Reuters, the Islamic finance market in Bangladesh is expected to experience significant growth in the coming years, driven by an increasing Muslim population and rising awareness of Shariah-compliant financial products. This growth presents a major opportunity for Eastern Bank to become a leading provider of Islamic banking services in Bangladesh and beyond.

The global growth of Islamic finance has been fueled by several factors, including the increasing demand for ethical financial products, the rising number of Muslims worldwide, and the growing recognition of the benefits of Shariah-compliant banking. For Eastern Bank, this presents an exciting opportunity to position itself as a key player in the global Islamic finance market.

A New Chapter for Eastern Bank Services

With the launch of its Islamic banking services, Eastern Bank has positioned itself as a leading provider of Sharia-compliant financial products in Bangladesh. The bank’s focus on transparency, ethical banking practices, and customer satisfaction ensures that its Islamic banking division is well-equipped to meet the needs of its customers.

As the demand for Islamic banking continues to grow, Eastern Bank Services is poised to play a significant role in the future of ethical finance in Bangladesh. By offering innovative products like Continuous Musharakah Finance and ensuring full compliance with Shariah principles, Eastern Bank is setting a new standard for Islamic banking in the region.

This launch marks the beginning of a new chapter for Eastern Bank, one that will see the bank expand its reach and continue to provide ethical financial solutions to customers across Bangladesh. As Islamic finance continues to grow both locally and globally, Eastern Bank is well-positioned to be at the forefront of this rapidly evolving industry.