Bangladesh Bank has taken a significant step to improve governance, transparency, and the proper application of Shariah principles in the country’s Islamic banking sector. This initiative aims to ensure that Islamic financial institutions operate according to the highest standards of Islamic law.
Recently, the central bank approved a new policy for forming its own Shariah Advisory Board (SAB), a senior official confirmed 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 officially adopted during the 444th meeting of the bank’s Board of Directors, according to a report by UNB on Friday.
By establishing this board, Bangladesh is joining other countries with similar bodies, including Malaysia, Bahrain, Oman, Pakistan, Indonesia, Iran, Kuwait, and the UAE. These countries have already set up dedicated Shariah Advisory Councils or Boards to regulate and guide their Islamic banking sectors.
Officials noted that forming a skilled SAB is essential for making Bangladesh’s Islamic banking sector more dynamic, robust, and aligned with contemporary financial practices. The board will play a key role in resolving doubtful issues related to Islamic banks, financial institutions, and Shariah-compliant financial services.
In addition to resolving such matters, the SAB will be responsible for setting industry standards, vetting new Islamic banking products, and providing necessary guidance and resolutions. This will help ensure that all Islamic banking activities remain compliant with Shariah principles.
Moreover, Article 16 of the recently enacted Bank Resolution Ordinance 2025 explicitly empowers Bangladesh Bank to establish its own Shariah Advisory Board. This legal provision strengthens the bank’s authority to oversee and advise on matters related to Islamic banking.