Government to Issue Tk 3,000 Crore Sukuk for Rural Infrastructure at 7.50 Percent Profit

The government has taken an initiative to issue a short-term Islamic bond, the Bangladesh Government Investment Sukuk, worth Tk 3,000 crore to fund infrastructure development work in the country's rural areas.

The auction for the 182-day bond will be held on December 1. At maturity, investors will earn profit at an annual rate of 7.50 percent.

A Bangladesh Bank press release said the Sukuk is being issued under the Ijara method, as Sukuk al-Ijara, against the 'Priority Important Rural Infrastructure Development Project'.

The bond, with a face value of Tk 3,000 crore, will mature on June 2, 2027.

Under the set terms, a one-time total profit of Tk 112 crore 19 lakh will be paid to investors at the end of the 182-day term, calculated on the basis of the annual profit rate of 7.50 percent.

The auction will be conducted through Bangladesh Bank's own technology platform, the Shariah Securities Module (SSM).

The Shariah Advisory Committee under the central bank's Debt Management Department has already approved the prospectus and the Shariah declaration for the issue. Bangladesh Bank said this has finalised the formalities and preparations for holding the auction.

All scheduled banks and finance companies that maintain current or Al-Wadiah current accounts with Bangladesh Bank will be able to take part directly in the investment process.

Domestic and foreign individual investors, corporate bodies, investment and insurance companies, and institutions such as provident funds and the deposit insurance fund will also be able to invest. As they cannot join the auction directly, these individuals and institutions will have to complete the application process through a bank or financial institution that holds an account with Bangladesh Bank.

Interested investors will be able to apply to buy Sukuk for a minimum of Tk 10,000 and in multiples of that amount.

Bids must be submitted online on the SSM platform using the investor's own Sukuk Investor (SI) ID between 10 am and 1 pm on the scheduled day. New investors must complete the process of opening an SI ID with the help of their bank by November 29.

Winning bidders will be informed of the amount of Sukuk allocated to them in their SI ID at 3 pm on December 1.