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The government has raised Tk 4 billion rupees for a nationwide drinking water supply project through this auction at the Bangladesh Bank headquarters on Monday. Bangladesh Bank is issuing this bond on behalf of the government.
Sirajul Islam, spokesperson and chief executive of the Bank of Bangladesh, said a total of 39 applications from two people and 36 banks and financial institutions were put up for auction. A total of 15,153.10 crore BD was presented for bonds worth Tk 4,000 crore. Proportionally, everyone receives a bond certificate.
The government will pay a 4.69 percent annual profit against this bond. The proceeds will be distributed every six months. The rate of return on Sharia bonds is fixed.
Sukuk is an Arabic word that means to grant legal rights to someone with a seal. The Islamic bond based on Sharia is known as ‘Sukuk’.
Conventional bonds are a type of debt. Pays interest to the investor against the loan. However, it does not comply with Shariah.
Sharia-based bonds are considered sukuk as an investment certificate, in exchange for which there is a guarantee of ownership of the assets. They get a certain rate of return on investment.
The first Sukuk launched by the Bangladesh Bank contrasts with the resources of the “Safe Water Supply Project Nationwide” of the Department of Public Health Engineering.
The project will be built with money from investors; The government will rent it out. Investors will benefit from this rental money. At the end of the term, the government will buy the entire project and return the original money to the investors. In this way the activities of this voucher will be carried out.
On October 8, the government approved a policy on the issue and the management of Sukuk. In the fourth paragraph of the policy, the government has given the Bangladesh Bank the responsibility of “special purpose vehicle” or SPV and trustee of this bond.
Bangladesh Bank will sell Sukuk certificates worth Rs 6 billion to investors in two phases.
According to a press release issued by the Bank of Bangladesh, Sharia-based banks and financial institutions now hold more than 45 percent of excess liquidity in the country’s banking sector.
Sukuk has been introduced with the aim of expanding and facilitating Shariah-based financing in the country’s ongoing economic development activities.
“Through the issuance of Sukuk, the liquidity of this type of banks and financial institutions will be able to be used by the government at low cost in various development projects, on the other hand, institutions based on the Shariah will be able to use alternative Sukuk as SLR “.
In addition to Shariah compliant banks and financial institutions, conventional banks, financial institutions, and individuals also have the opportunity to invest in Suku.
The press release read: “The Sukuk issue in question marks the beginning of a new horizon in the financial sector of Bangladesh. The Sukuk issue will be an alternative source of funding for government development activities, as well as a new impetus for economic development. “
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