Profile: Islami Bank BangladeshJanuary 23, 2012
Islami Bank Bangladesh Limited describes itself as South East Asia’s first sharia bank. In the 1980s, it helped handle transactions for the Saudi-based Muslim World League to promote Wahhabism in Bangladesh.
IBBL is not a minor financial institution. Its September 2011 balance sheet shows bank assets of 330 billion Bangladeshi taka (BDT), or approximately 3.9 billion U.S. dollars. IBBL has about $3.5 billion in deposits, which would put it on par with a local/regional financial institution in the U.S. such as a large metropolitan credit union or a statewide bank system.
The bank’s sharia advisory board met most recently in December at the posh Islami Bank Tower, and was presided over by sharia board chairman Sheikh Moulana Muhammad Kutubuddin. The members of the sharia board get paid by the bank to give their blessing to the investments IBBL makes, and to approve the structures that IBBL uses avoid paying riba (interest) to their depositors or charging riba to their borrowers. IBBL has over 11 billion taka invested in “government” instruments, which suggests that Bangladesh’s taxpayers are on the hook for dividends being paid out to IBBL.
IBBL provides mostly mudarabah savings accounts for its customers, which in theory is a permissible Islamic form of profit-sharing, but in practice is probably like a conventional money market account. The difference is that the mudarabah profits are siphoned off by the sharia board to fund radical jihadist groups in the region like JMB and HUJI.
A portion of IBBL’s profits are spent as corporate zakat by the bank’s “charitable” wing, the Islami Bank Foundation. Last year, the Bangladeshi home ministry revealed intelligence that indicated that 8 percent of the bank’s profits were diverted as zakat to support jihad in Bangladesh.
IBBL has won numerous “best Islamic bank” awards, but that is mostly meaningless in a sector where sharia banks (like Unicorn Investment Bank) routinely win awards until it’s discovered that their CEOs have swindled or defrauded investors.