Despite facing a liquidity crisis for more than a year, both outstanding loans and deposits increased in ten Bangladeshi Islamic banks in February this year.
Outstanding loans at these banks stood at Tk455,525 crore - up by Tk 6,452 crore from a month earlier, while deposits were up by Tk4,762 crore to Tk 380,066 crore from January, according to the latest data of the Bangladesh Bank.
According to industry insiders, massive loan irregularities have been taking a huge toll on Islami Bank Bangladesh, Social Islami Bank, First Security Islami Bank, Union Bank, Global Islami Bank and ICB Islamic Bank.
The six have been facing shortfalls in cash reserve ratio and statutory liquidity ratio for a long time along with being hit by a deficit at their current accounts with the central bank.
However, insiders say Al Arafah Islami Bank, Standard Bank, Exim Bank and Shahjalal Islami Bank—have been doing comparatively well.
Bankers said money added in the form of interest has also played an important role in the increase in Islamic banks' outstanding loans and deposits in February.
Despite being in bad shape, the problematic six are still disbursing loans, which is fuelling the outstanding loans at Islamic banks, they added.
Some of the Islamic banks continue to take liquidity support from the banking regulator, said a central bank official.
Authorities have said some Islamic banks are largely involved in loan irregularities, which have deteriorated their corporate governance and led to their current predicament.
