Path to Ethical Finance for Sustainable Growth

TNN: Sharia-based banks in Bangladesh are struggling but are reviving with some regulatory support. What is your opinion on supporting these banks by printing money?
MTAK: Sharia-based banks are indeed facing challenges, but with proper regulatory assistance, they are on a path to recovery. While printing money might provide short-term liquidity, it is crucial to proceed cautiously. The long-term sustainability of the
banking sector depends on strengthening institutions rather than relying on temporary cash infusions.
TNN: Why are many fourth-generation banks transitioning to Islamic banking?
MTAK: This shift is driven by changing consumer preferences. Many individuals, both Muslim and non-Muslim, are now seeking ethical and moral banking solutions. Islamic banking enables these institutions to access a growing market focused on socially responsible financial practices.
TNN: How is Islamic banking aligning with digital transformation locally and globally?
MTAK: Islamic banks are increasingly adopting digital technologies to enhance customer experience and accessibility. Globally, fintech innovations are enabling Islamic banks to remain competitive, fostering a digital ecosystem that aligns with Sharia principles.
TNN: What is Islamic banking’s market share in digital banking?
MTAK: Islamic banking’s market share in digital banking is steadily increasing. With the rise of mobile banking and user-friendly apps, Sharia-compliant banks are attracting tech-savvy customers.
TNN: Do you have any innovative ideas for cashless banking?
MTAK: One idea is developing digital platforms for micro-financing through profit-sharing agreements, in line with Islamic finance principles. This would promote a cashless economy while maintaining ethical practices.
TNN: What changes are planned for branch banking?
MTAK: We aim to expand accessibility by opening branches in underserved areas. This strategy will enhance financial inclusion while broadening our customer base.
TNN: What are your thoughts on the recent initiative to merge weaker banks?
MTAK: The initiative is a necessary step towards strengthening the sector. Consolidation can enhance stability and customer confidence. However, it is vital to ensure that the process adheres to Sharia principles to maintain the integrity of Islamic banking.
TNN: Is the Banker’s Book Evidence Act aligned with modern banking practices?
MTAK: The Act is somewhat outdated and needs to be revised to better suit current banking practices. It should promote transparency without compromising efficiency.
TNN: What are your views on e-KYC?
MTAK: e-KYC is a timely and realistic development. It simplifies processes, reduces fraud, and improves customer onboarding. However, safeguarding customer data and privacy must be a priority.
TNN: Are rural customers more inclined towards regular banking? Does this affect cost management?
MTAK: Yes, rural customers show significant interest in regular banking, which can impact cost management. Investing in technology-driven solutions can reduce operational costs while meeting their needs.
TNN: Between agent and digital banking, which do you prioritise?
MTAK: Digital banking takes precedence due to its broader reach and efficiency. While agent banking has its role, digital solutions are key to expanding accessibility and customer engagement.
TNN: How does Islamic banking contribute to a rights-based economy?
MTAK: Islamic banking fosters financial inclusion and ethical investment. Its profit-sharing model ensures fair distribution of economic benefits, promoting social equity.
TNN: Why isn’t gold consistently used in profit or interest calculations despite its use in Zakat or Moh’rana?
MTAK: While Islamic law often references gold as a benchmark, modern financial complexities require flexibility. Strict adherence to gold-based valuation may not reflect today’s economic realities.
TNN: How do Islamic economists view currency valuation based on gold?
MTAK: Islamic economists advocate for a balanced approach, combining ethical principles with frameworks that address modern financial dynamics.
TNN: What is your assessment of Bangladesh Bank’s Sharia compliance efforts?
MTAK: Bangladesh Bank’s initiatives demonstrate a commendable effort to integrate Sharia principles within traditional banking. This fosters a supportive environment for the growth of Islamic banking.
TNN: What is the future of Sukuk (Islamic bonds)?
MTAK:Sukuk has a promising future, meeting the rising demand for ethical investment options. Their appeal lies in adhering to Sharia guidelines while providing viable funding solutions.
TNN: Can private banks issue their own Islamic bonds?
MTAK: Yes, subject to regulatory guidelines, private banks in Bangladesh can issue Islamic bonds. This fosters innovation and competition within the sector.
TNN: Has Islamic banking gained confidence among clients, particularly Muslims?
MTAK: Absolutely. Islamic banking has built trust by adhering to Sharia principles and prioritising ethical finance, fostering greater financial inclusivity.
TNN: What is the global appeal of Islamic banking?
MTAK: Its universal appeal lies in its commitment to ethical practices and social responsibility, attracting clients beyond religious boundaries.
TNN: How can the Islamic economy be popularised among non-Muslims?
MTAK: Education is key. Workshops, seminars, and collaborations can raise awareness of Islamic banking’s universal values and benefits.
TNN: What is your opinion on the Islamic Banking Act 2024?
MTAK: The draft law addresses long-standing demands for regulation and ensures adherence to Sharia principles. It supports financial inclusion, sustainable banking, and greater transparency, reflecting best practices in Islamic banking.