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Bangladesh Bank to Set up Shariah Advisory Board Soon
Bangladesh Bank has decided to establish a Shariah Advisory Board (SAB) to strengthen good governance, transparency, and strict compliance with Islamic banking principles in the country’s growing Islamic finance sector.
The central bank has approved a comprehensive policy framework titled “Bangladesh Bank’s Policy on the Formation, Appointment-Removal of Members, and Responsibilities of the Shariah Advisory Board (SAB)–2025.” The policy was endorsed at the 444th meeting of the bank’s Board of Directors.
Officials said the formation of the SAB will mark a significant step toward institutionalising Shariah governance across Islamic financial institutions in Bangladesh. The board will function as an independent advisory body to guide the central bank on Shariah matters and ensure consistency in the interpretation and implementation of Islamic financial principles.
According to the new policy, the SAB will be empowered to provide rulings on complex or doubtful issues related to Islamic banks, financial institutions, and other Shariah-based finance operations. It will also be tasked with developing standardised Shariah guidelines, approving new Islamic financial products, and offering advisory support to maintain compliance within the sector.
The initiative reflects Bangladesh Bank’s efforts to align its Islamic banking supervision framework with international best practices. Similar advisory bodies already exist under central banks in Malaysia, Bahrain, Oman, Pakistan, Indonesia, Iran, Kuwait, and the United Arab Emirates.
The establishment of the SAB has also been reinforced under Article 16 of the Bank Resolution Ordinance 2025, which authorises the central bank to constitute its own Shariah Advisory Board for regulatory and resolution-related guidance concerning Islamic banks.
Officials believe the move will enhance investor confidence, promote innovation in Islamic financial products, and ensure the sustainable growth of the sector in line with global standards.