The central bank has set a Sukuk allotment quota, giving priority to the Shariah-based Islamic banks, non-banking financial institutions (NBFIs) and insurance companies, for the second auction of the bonds, officials said.
As per the Bangladesh Bank (BB) criteria, the Shariah-based Islamic banks, NBFIs and insurance companies will be eligible to get 70 per cent Sukuk certificates, while the conventional banks and other financial institutions will be entitled to receive 15 per cent of the bonds.
Besides, 10 per cent of the Bangladesh Government Investment Sukuk (BGIS), generally known as Ijarah Sukuk, will be sanctioned to Islamic branch and windows of the conventional banks, while individual investors will be eligible to get the remaining 5.0 per cent of the bonds.
The final auction for Sukuk bonds is scheduled to be held today (Wednesday), instead of June 28, to raise Tk 40 billion for implementation of a safe water supply project by June 30, 2025.
"We've set the quota, giving emphasis on the Shariah-based banks, NBFIs and insurances for creating new investment opportunities for them," a BB senior official told the FE while explaining the allotment criteria.
The Islamic financial institutions, particularly banks, will be eligible to meet their statutory liquidity ratio (SLR) requirement, as set by the central bank, with the BGIS, according to him.
Currently, the required SLR is 13 per cent daily for the conventional banks, and 5.5 per cent for the Shariah-based Islamic banks.
Sukuk is an Islamic financial certificate, similar to a treasury bond and structured to generate returns in compliance with Islamic finance principles.
Investors will receive a profit of 4.69 per cent on their investment in the Islamic bonds. Profits will be paid on a half-yearly basis.
The profit rate of the Sukuk is higher than the five-year Bangladesh Government Treasury Bonds (BGTBs).
Currently, the cut-off yield on the BGTBs stood at 3.98 per cent.
A client will have to invest a minimum of Tk 10,000 in the securities, and there is no upper limit. Banks, corporate institutions and individuals will be permitted to invest in the securities.
In the first phase of the auction - held in December, different banks and individuals placed 39 bids worth Tk 151.53 billion against the targeted amount of Tk 40 billion.
The government will raise Tk 80 billion through issuance of the Sukuk in two phases to implement the safe water supply project.