The Islami Bank Foundation, a non-government organization funded by the Islami Bank Bangladesh Limited, has recently been accused of operating an unauthorized microcredit program, according to a recent investigation conducted by Bangladesh Bank, the central bank of Bangladesh. The Islami Bank Foundation is funded by the Islami Bank Bangladesh Limited, a Shariah-compliant bank in Bangladesh, and supports social welfare, health, education and medical care needs. Total assets of Islami Bank Bangladesh Limited are BDT 289 billion (USD 4 billion) at March 31, 2010.
Microfinance institutions or non-government organizations operating in Bangladesh have to obtain a license from the Microcredit Regulatory Authority (MRA) in Bangladesh. According to the investigation, the Islami Bank Foundation does not have an MRA license.
Mr Abu Nasser Muhammad Abduz Zaher, the chairman of Islami Bank Foundation, has stated that the foundation no longer operates microcredit programs and has been operating a rural development scheme since December 2009. He noted that the foundation operated a microcredit program until November 2009, but the program was terminated following an MRA order [1].
By Jennifer Shevock, Research Associate
About Bangladesh Bank:
Established in 1972, the Bangladesh Bank is the central bank of Bangladesh. The bank’s mission is to regulate reserves, manage the country’s monetary and credit system and foster development of the country’s economy. Total deposits as of May 2010 are BDT 3 trillion (USD 43 billion).
About Islami Bank Foundation:
The Islami Bank Foundation, a non-government organization funded by the Islami Bank Bangladesh Limited, a Shariah-compliant bank in Bangladesh, supports social welfare, health, education and medical care needs. Total assets of Islami Bank Bangladesh Limited are BDT 289 billion (USD 4 billion) at March 31, 2010.
About the Microfinance Regulatory Authority (Bangladesh)
The Microcredit Regulatory Authority monitors and supervises microfinance operations of non-government organizations in Bangladesh. It was created by the Government of Peoples’ Republic of Bangladesh under the “Microcredit Regulatory Authority Act”. The Authority’s responsibilities include licensing microfinance operations, ensuring license compliance and enforcing sanctions.
Sources and Additional Resources:
[1] “BB finds Islami Bank Foundation at fault” August 10, 2010. http://www.thedailystar.net/newDesign/news-details.php?nid=150155
MICROCAPITAL BRIEF: “Microcredit Regulatory Authority of Bangladesh Will Soon Finalize Microfinance Lending Rates” August 11, 2010. https://www.microcapital.org/microcapital-brief-microcredit-regulatory-authority-of-bangladesh-will-soon-finalize-microfinance-lending-rates/
MICROCAPITAL BRIEF: “Government of Bangladesh to Limit Interest Rates for Microfinance Institutions (MFIs)” April 13, 2010.
https://www.microcapital.org/microcapital-brief-government-of-bangladesh-to-limit-interest-rates-for-microfinance-institutions-mfis/#more-4660
MICROCAPITAL STORY: “Bangladesh Microcredit Regulatory Agency (MRA) Limits Interest Rates for Microfinance Institutions” May 6, 2009. https://www.microcapital.org/microcapital-story-bangladesh-microcredit-regulatory-agency-mra-limits-interest-rates-for-microfinance-institutions/
MicroCapital Universe: Bangladesh Bank: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Bangladesh+Bank+%28BB%29
MicroCapital Universe: Islami Bank Foundation:
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Islami+Bank+Foundation
MicroCapital Universe: Microfinance Regulatory Authority: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Microfinance+Regulatory+Authority
Browse the MicroCapital Universe and add your entry to the wiki at: https://www.microcapital.org/microfinanceuniverse/
Similar Posts:
- MICROCAPITAL BRIEF: Non-performing Loan (NPL) Ratios Up Among Microfinance Providers in Bangladesh
- MICROCAPITAL BRIEF: Regulator Licenses ADIB Egypt to Open Shariah-compliant Subsidiary, ADI Microfinance
- MICROCAPITAL BRIEF: Mi-Bospo of Bosnia and Herzegovina Borrowing $2.2m from Grameen Credit Agricole Foundation for Microfinance Lending
- MICROCAPITAL BRIEF: Grameen Crédit Agricole Foundation Loans $3.2m to Faten for Microfinance in Palestine
- MICROFINANCE PAPER WRAP-UP: “Green Energy Finance and Gender Disparity: The Case of Mountain Areas in Bangladesh,” by Sakib Bin Amin et al, Published by Copenhagen Business School
