The Bangladesh Bank (BB) has announced new guidelines for the allocation of sukuk bonds, with half of each issue now designated for Shariah-based banks, financial institutions, and insurance companies. Additionally, 30 percent will go to Islamic branches and windows of conventional banks, while individual investors will receive a dedicated 10 percent quota, previously shared with provident funds, investment companies, and corporate entities.
Previously, conventional banks, financial institutions, and insurance companies, along with provident funds, gratuity funds, and mutual funds, collectively held a 5 percent share. Now, they have been merged into a single 10 percent category.
Istequemal Hussain, director of the Debt Management Department at the BB, explained that the allocation for sukuk subscriptions is now 80 percent for Shariah-based banks and Islamic banking branches and windows of conventional banks. This move was made to accommodate the restrictions faced by Shariah-based banks, which cannot invest in conventional bonds and treasury bills unlike conventional banks.
The BB has made these changes in allocation ahead of the upcoming auction of a new sukuk bond. The government aims to raise Tk 30,000 crore in the current fiscal year through various sukuk bonds, with interest in sukuk on the rise since its introduction in December 2020. The government has already raised over Tk 53,000 crore through the auction of the first short-term sukuk bond.
