Bangladesh issues sukuk Monday to raise Tk 80b

Published 24 Dec,2020 via The Financial Express - Sukuk, the Islamic Shariah-compliant bond, will be issued on Monday, marking the history in the country's financial market.

The Bangladesh Government Islamic Investment Sukuk worth Tk 40 billion will be issued, officials of Bangladesh, who are familiar with the development, told the FE on Wednesday.

The denomination of each Sukuk is Tk 10,000. Any Muslim and institution can purchase it.

Individuals can purchase through the banking channel. They will need to open separate accounts with the banks.

An individual may buy a minimum of one such bond and there is no upper limit.

The government will raise Tk 80 billion through the Sukuk for the implementation of a safe water supply project across the country beginning from January next.

Islamic bond is different from that of the traditional bond. There is a need for a project to raise funds from the Islamic people.

There are usually three parties involved in an Islamic Sukuk-originator, Special Purpose Vehicle and investors. The government is the originator of the Sukuk.

Bangladesh Bank will act as a Special Purpose Vehicle to administer it. It will also act as the trusty to resolve any potential conflict between the investors and the government.

Investors will receive a profit of 4.69 per cent on their aggregate investment in the Islamic bond.

Profits will be paid to investors on a semi-annual basis (annualised).

The duration of the water supply project is five years, while the tenure of the bond is also five years.

The overall cost of the project is estimated at Tk 88.51 billion.

The Department of Public Health Engineering (DPHE) will implement the project by June 30, 2025. Bangladesh Bank and Finance Division have already signed an agreement in this connection on Tuesday last.

Copyright © 2020 International Publications Limited. Provided by SyndiGate Media Inc. (Syndigate.info)

DISCLAIMER: This content is provided to us “as is” and unedited by an external third party provider. We cannot attest to or guarantee the accuracy of information provided in this article from the external third party provider. We do not endorse any views or opinions included in this article.