Banks yesterday flocked to sukuk to invest their idle funds and manage a better yield than in conventional treasury bills and bonds as Bangladesh held its first-ever auction for the Islamic bond.
Banks and individuals placed 39 bids worth Tk 15,153 crore against the targeted amount of Tk 4,000 crore.
The auction committee of the central bank allocated the fund proportionately among the bidders. As a result, every bidder received sukuks equal to 26.4 per cent of their investment.
A sukuk is an Islamic financial certificate, similar to a treasury bond and structured to generate returns in compliance with Islamic finance principles.
The government will raise Tk 8,000 crore through the issuance of the sukuk to implement a safe water supply project.
Tk 8,000cr Islamic bond for safe water supply
BB, finance ministry sign MoU as the first-ever sukuk will hit market next week
Bangladesh has made significant progress on universal access to improved water sources. But access to safe drinking water is still low. Photo: Star/File
Bangladesh Bank will issue a sukuk next week, the first of its kind in Bangladesh, to raise Tk 8,000 crore for the implementation of a safe water supply project.
The finance ministry is the originator of the Shariah-compliant bond, and the central bank will act as a special purpose vehicle (SPV) for the issuance of the security.