General

BB holds maiden auction for govt-sponsored Sharia-based “Izara Sukuk” bond

The maiden auction for investment in the government-sponsored “Izara Sukuk”, the first Islamic Shariah-based bond, has been held by Bangladesh Bank.

According to a central bank press release, the first auction was held to invite investment in the Tk 4000 crore fund, a part of a total Tk 8,000 crore bond, created from the surplus liquidity of different Sharia-based banks in the country.

The fund will be utilized for the Countrywide Safe Drinking Water Supply Project which will be a 5-year term financing with 4.69 percent profits in the first phase.

The bond received an overwhelming response as the participating bidders placed demands for Tk 15,153 crore against the bond value.

“The bond was rationally issued among the bidders due the increased demand compared with the value of the bond,” said the press release.

This has created a new horizon in Bangladesh’s financial sector which will play a vital role in bringing a new pace in the development beside the creation of alternative financing options, said the BB.

Earlier, the Bangladesh Bank issued a circular on October 8 this year to create the Sukuk bond to expand the bond markets by mobilising funds from Shariah-based banks to utilize their surplus liquidity in the development project.

Source: United News of Bangladesh