Fitch downgraded Bangladesh to 'B+'/Stable on 27 May 2024, reflecting weaker external buffers. There is a lack of precedents for default resolution for Islamic banks in Bangladesh and most key Islamic finance markets. "It's yet to be seen how bankruptcy courts treat Islamic bank defaults compared to conventional bank defaults, whether Mudaraba-based depositors – which are based on profit-and-loss sharing contracts – will have full recourse to banks, and if all depositors will be able to enforce their contractual rights in local courts." Mudaraba-based deposits made up about 80% of all Islamic banks' deposits at the end of 2023. Bankruptcy regimes in Bangladesh and most countries with prevalent Islamic banking sectors are still in their early stages, also remaining largely untested and underdeveloped. Islamic banks' excess liquidity – defined as total cash reserves minus required reserves with the central bank – rose by 43% over Q4'23 (to Tk11,100 crore). However, excess liquidity fell by 13.7% over 2023.