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The government has raised Tk 5,000 crore by issuing shariah-compliant bond Sukuk to finance ‘need-based Government Primary School Development Project (1st stage)’.
Eligible investors have submitted a total bid of Tk 23,304 crore against Tk 5,000 crore Sukuk. The investors will receive 4.65 per cent interest per annum on their investment.
The auction was held at the BB head office on Wednesday, the central bank said.
More bids were submitted than the allotted Sukuk in three classes (shariah-based banks, financial institutions and insurance companies) other than individual investors. The Sukuk had been distributed proportionately among the bidders.
Sukuk is an Islamic financial certificate, similar to a treasury bond, complying with Shariah laws.
Meanwhile, in the last fiscal year, the government issued Sukuk for the first time to raise Tk 8,000 crore to implement a safe water supply project.
Meanwhile, the government plans to raise another Tk 5,000 crore through the Islamic bond. As a special-purpose vehicle (SPV) for the issuance of the upcoming government securities, the central bank has completed all preparations to issue the second set of Sukuk. As per provisions, there are usually three parties involved with an Islamic Sukuk - originator, SPV and investors. The government is the originator of the Sukuk.
The central bank is acting as an SPV to administer risk-free securities. It will also act as the trusty to resolve any potential conflict between the investors and the government.
