The government will raise Tk10,000 crore from Sammilito Islami Bank under Shariah principles by issuing a 10-year sukuk, or Islamic bond, marking the largest investment by the newly formed lender, officials said.
The instrument, titled Bangladesh Government Special Sukuk-1, will carry an annual return of 9.75 per cent for the bank over its 10-year tenor.
The sukuk issuance had been cleared by its Shariah Advisory Committee, chaired by Deputy Governor Md Kabir Ahmed, following two meetings held on 7 January and 8. The committee unanimously agreed to the issuance under the ijara structure.
Seven housing projects built by the Public Works Department for government employees and selected passenger train services of Bangladesh Railway have been designated as the underlying assets for the sukuk.
The bond will be issued through private placement directly in favour of Sammilito Islami Bank. The government is set to receive the Tk10,000 crore from the bank on January 14, according to the central bank.
Sector insiders said the sukuk would provide the government with a large pool of long-term funds for development projects while expanding avenues for non-interest-based financing. For Islamic banks, the instrument offers a low-risk, Shariah-compliant investment option.
Sammilito Islami Bank was formed by merging five troubled lenders – EXIM Bank, Social Islami Bank, First Security Islami Bank, Global Islami Bank and Union Bank – after years of loan irregularities that pushed several banks into deep distress.
The paid-up capital of Sammilito Islami Bank PLC has been set at Tk35,000 crore, of which the government will provide Tk20,000 crore, with the remaining Tk15,000 crore coming from depositor shares. Its authorised capital stands at Tk40,000 crore.
