An Evaluation of Remittance Inflows Through Islamic Banks in Bangladesh
DOI:
https://doi.org/10.61455/deujis.v3i01.326Keywords:
remittance, islamic banks, sharia-compliant finance, migrant workers, economic developmentAbstract
Objective: This study aims to explore the role of Islamic banks in managing remittance inflows in Bangladesh, focusing on their contribution to economic stability and financial inclusion. Theoretical framework: This study is based on Islamic economic and financial development theory, which emphasizes the role of Islamic financial institutions in supporting economic growth through the principles of sharia compliance, distribution fairness, and operational efficiency in financial transactions. Literature review: The literature review includes data and publications from Bangladesh banks, Islamic bank reports, academic journals, and previous articles, as well as global data sources such as the World Bank, which highlights the dynamics of remittances and the role of Islamic financial institutions in the macroeconomic context of Bangladesh. Methods: This study uses secondary data from three base quarters (October–December 2018, 2020, and 2022), which are then compared with the previous quarter and the same quarter of the previous year, to analyze the growth of Islamic bank branches, remittance market share, and their operational strength. Results: The results of the study show that Islamic banks, especially Islami Bank Bangladesh Limited, dominate the remittance market, followed by Al-Arafah Islami Bank Limited. Despite the growth, these banks also face some operational challenges that need to be addressed. Implications: These findings provide important implications for policymakers and the Islamic banking industry, namely the need to strengthen infrastructure and operational strategies to increase remittance flows through Islamic channels to promote national economic stability. Novelty: The novelty of this study lies in its cross-quarter comparative approach and specific focus on the contribution of Islamic banks in remittances, which has not been systematically studied in the context of Bangladesh.
References
W. Bank, “Migration and remittances data.” 2023. [Online]. Available: https://www.worldbank.org
W. Bank, “Migration and Development Brief 38.” 2023. [Online]. Available: https://www.worldbank.org
S. Ridha, I. Rosyadi, M. A. Maisu, and ..., “Management of Zakat Funds for Education Sharia Economic Law Perspective,” Demak Univers. J. Islam Sharia, vol. 2, no. 1, pp. 27–36, 2024, https://doi.org/10.61455/deujis.v2i01.85
A. Ismail, H. D. Dwi Purnomo, M. Arifin, S. Avia Difaputra, and H. S. Runing Sawitri, “The Effects of Ethics on Moral Hazard in Business Management Moderated By Corporate Governance: a Literature Review,” Profetika J. Stud. Islam, vol. 24, no. 02, pp. 269–276, 2023, https://doi.org/10.23917/profetika.v24i02.2594.
M. Hasan and J. Dridi, “The effects of the global crisis on Islamic and conventional banks: A comparative study,” IMF Work. Pap., no. 11/201, 2011, https://doi.org/10.5089/9781463902154.001.
D. P. Faridti, N. D. Oktaviani, S. Baroroh, Z. Islah, M. Faqih, and M. Kusumawardani, “Islamic Business Ethics : Practice of Buying and Selling Antibiotics Without a Doctor ’ s Prescription,” vol. 1, no. 3, pp. 189–196, 2024, https://doi.org/10.61455/sicopus.v1i03.78.
R. A. Syam, T. A. Hutama, I. Subekti, A. Nareswara, F. Bariyah, and R. Aulia, “The Relationship of Islamic Law and Ethics in Pharmacist Practice : A Literature Review,” Solo Int. Collab. Publ. Soc. Sci. Humanit., vol. 1, no. 3, pp. 173–180, 2023, https://doi.org/10.61455/sicopus.v1i03.67.
B. Bank, “Quarterly Report on Islamic Banking in Bangladesh (October-December 2022),” 2022. [Online]. Available: https://www.bb.org.bd/
D. Noviani, I. Arifin, M. S. Mubarak, and B. Humaid, “Implementation Of Ushul Fiqh As A Legal Basis For Solving Sharia-Based Economic Problems,” vol. 25, no. 1, pp. 57–72, 2024, https://doi.org/10.23917/profetika.v25i01.4127.
M. Meriyati, M. N. Agus Saputra, I. Arifin, M. Panorama, and M. S. Mubarak Bin Humaid, “Maqasid Sharia’s View on the Scarcity of Subsidized Fertilizers on the Welfare of Farmers in East Oku Indonesia,” Profetika J. Stud. Islam, vol. 24, no. 02, pp. 187–195, 2023, https://doi.org/10.23917/profetika.v24i02.1954.
B. B. Zaman, M. T. Affandi, and A. Benichou, “Professional Work and Productive Work to Improve the People’s Economy: an Analysis Based on Prophetic Revelation,” Demak Univers. J. Islam Sharia, vol. 1, no. 2, pp. 131–142, 2023, https://doi.org/10.61455/deujis.v1i02.20.
I. Kurniawan et al., “Mushroom Cultivation for Farmer Existence : A Normative and Economic Review,” vol. 1, no. 2, pp. 119–131, 2023, https://doi.org/10.61455/sicopus.v1i02.50.
A. D. Amri et al., “Development and Growth of Financial Sector Stock Market on Investment Climate : Study on Bank Syariah Indonesia and Bank Mandiri,” Solo Int. Collab. Publ. Soc. Sci. Humanit., vol. 2, no. 1, pp. 11–24, 2024, https://doi.org/10.61455/sicopus.v2i01.98
H. Suryokumoro and Hikmatul Ula, “Menelaah Koperasi Era Omnibus Law,” Mulawarman Law Rev., vol. 5, no. 32, pp. 80–95, 2020, https://doi.org/10.30872/mulrev.v5i2.340.
B. Bank, “Islamic banking development in Bangladesh: Progress and prospects.” 2022. [Online]. Available: https://www.bb.org.bd/
A. D. Amry, F. Safitri, A. D. Aulia, K. N. Misriyah, D. Nurrokhim, and R. Hidayat, “Factors Affecting the Number of Tourist Arrivals as Well as Unemployment and Poverty on Jambi’s Economic Growth,” Solo Int. Collab. Publ. Soc. Sci. Humanit., vol. 1, no. 01, pp. 62–71, 2023, https://doi.org/10.61455/sicopus.v1i01.38.
M. A. F. Chowdhury and M. S. Hossain, “Islamic banking in Bangladesh: Growth and performance,” J. Islam. Econ., vol. 11, no. 2, pp. 85–102, 2019.
B. Bank, “Annual report on Islamic banking in Bangladesh.” 2021. [Online]. Available: https://www.bb.org.bd/
F. A. Qolbi et al., “Development and Application of Akad Rahn in Nash Perspective,” Demak Univers. J. Islam Sharia, vol. 2, no. 1, pp. 47–54, 2024, https://doi.org/10.61455/deujis.v2i01.95.
M. A. Haneef, A. H. Pramanik, M. O. Mohammed, M. F. Bin Amin, and A. D. Muhammad, “Integration of waqf-Islamic microfinance model for poverty reduction: The case of Bangladesh,” Int. J. Islam. Middle East. Financ. Manag., vol. 8, no. 2, pp. 246–270, 2015, https://doi.org/10.1108/IMEFM-03-2014-0029.
T. Siddiqui and C. R. Abrar, “Migrant worker remittances and micro-finance in Bangladesh,” ILO Work. Pap., no. 38, 2003, [Online]. Available: https://www.ilo.org
R. Karim and M. M. Chowdhury, “Remittance channel preference among Bangladeshi migrants: Role of Islamic banks,” Int. J. Bank. Financ., vol. 14, no. 2, pp. 103–121, 2018.
S. N. Asia, M. Muthoifin, M. S. Apriantoro, A. Amrin, S. Sya’roni, and R. Irfan Rosyadi, “Analysis of Islamic Economic Law on Fishing Pool Business in Indonesia,” Demak Univers. J. Islam Sharia, vol. 1, no. 01, pp. 01–09, 2023, https://doi.org/10.61455/deujis.v1i01.7.
M. R. Kurniawan and S. T. Anggraeni, “The Problem of Akad Murabahah in Sharia Banks : Between Profit-Oriented and Sharia Compliance,” Demak Univers. J. Islam Sharia, vol. 2, no. 1, pp. 55–66, 2024, https://doi.org/10.61455/deujis.v2i01.97.
M. S. Uddin and S. Akhter, “Remittance services of Islami Bank Bangladesh Limited: A performance analysis,” J. Bus. Econ., vol. 8, no. 1, pp. 75–90, 2020.
R. Ahmed and M. Mohsin, “Technological adaptation in Islamic banks: A study on remittance processing in Bangladesh,” J. Islam. Financ., vol. 10, no. 1, pp. 45–57, 2021.
M. Abuzar, L. Yafi, I. Afiyah, and I. Amelia, “Strategy and Implementation of Islamic Personality Development through the Internalization of Religious Values at Madrasah Aliyah Dakka, Bangladesh,” Solo Univers. J. Islam. Educ. Multicult., vol. 2, no. 2, pp. 167–180, 2024, https://doi.org/10.61455/sujiem.v2i02.201.
T. A. Chowdhury, “Government incentives and their impact on formal remittance channels: Evidence from Bangladesh,” South Asian Econ. J., vol. 22, no. 3, pp. 215–230, 2021.
W. Yuliani, “Metode Penelitian Deskriptif Kualitatif Dalam Perspektif Bimbingan Dan Konseling,” QUANTA J. Kaji. Bimbing. dan Konseling dalam Pendidik., vol. 2, no. 2, pp. 1–10, 2018, https://doi.org/10.22460/q.v2i2p83-91.1641.
D. Susanto, Risnita, and M. S. Jailani, “Teknik Pemeriksaan Keabsahan Data Dalam Penelitian Ilmiah,” J. QOSIM J. Pendidikan, Sos. Hum., vol. 1, no. 1, pp. 53–61, 2023, https://doi.org/10.61104/jq.v1i1.60.
H. Zukriadi, Sulaiman, U., “Aneka Macam Penelitian,” SAMBARA J. Pengabdi. Kpd. Masy., vol. 1, no. 1, pp. 36–46, 2023, https://doi.org/10.58540/sambarapkm.v1i1.157.
S. W. Purwanza dkk., Metodologi Penelitian Kuantitatif, Kualitatif dan Kombinasi, no. March. 2022.
M. Mulyadi, “Penelitian Kuantitatif Dan Kualitatif Serta Pemikiran Dasar Menggabungkannya,” J. Stud. Komun. dan Media, vol. 15, no. 1, p. 128, 2013, https://doi.org/10.31445/jskm.2011.150106.
M. Mulyadi, “Penelitian Kuantitatif Dan Kualitatif Serta Pemikiran Dasar Menggabungkannya [Quantitative and Qualitative Research and Basic Rationale to Combine Them],” J. Stud. Komun. dan Media, vol. 15, no. 1, pp. 128–138, 2019, https://doi.org/10.31445/jskm.2011.150106.
B. Bank, “Quarterly Report on Islamic Banking in Bangladesh (October-December 2020),” 2020. [Online]. Available: https://www.bb.org.bd/
B. Bank, “Quarterly Report on Islamic Banking in Bangladesh (October-December 2018),” 2018. [Online]. Available: https://www.bb.org.bd/
A. Islam and F. Hossain, “Can Islamic Banking be an Alternative to Conventional Banking ? A Survey on the Opinion of Depositors in Bangladesh,” Tazkia Islam. Financ. Bus. Rev., vol. 18, no. 2, pp. 224–246, 2024, [Online]. Available: https://tifbr-tazkia.org/index.php/TIFBR/article/view/354
I. Gazi, S. Miah, A. Al Masud, A. I. Hossain, and M. K. Rahman, “Contribution of the Banking Sector to Entrepreneurial Development: Paradigm Interventions and Enterprise Proliferation Abu,” Iran. J. Manag. Stud., vol. 16, no. 3, pp. 647–665, 2023, https://doi.org/0.22059/ijms.2022.338747.674962.
I. Setiawan, “Pembiayaan Umkm, Kinerja Bank Syariah Dan Pertumbuhan Ekonomi Di Indonesia,” Islam. Bank. J. Pemikir. Dan Pengemb. Perbank. Syariah, vol. 6, no. 2, pp. 263–278, 2021, https://doi.org/10.36908/isbank.v6i2.165.
M. M. Rahman, “Institutional Zakat Management in Bangladesh: Collection and Distribution Practices,” AZKA Int. J. Zakat Soc. Financ., vol. 5, no. 2, pp. 129–154, 2024, https://doi.org/10.51377/azjaf.vol5no2.192.
