BB to hold 2nd auction of Sukuk on June 9

The central bank on Monday announced to hold the 2nd auction of Sukuk, an Islamic financial certificate similar to a treasury bond, on June 9 to raise Tk 4,000 crore for a safe water supply project.

Earlier on December 28 last year, Bangladesh Bank issued the first ever Sukuk to raise Tk 8,000 crore. Of which, the BB raised 50 percent of the amount in the 1st auction.

Any resident and non-resident individuals and institutions can purchase Sukuk through banks and financial institutions, according to a press note issued by the BB on Tuesday.

The sukuk will mature in 5 years and investors will get 4.69 percent profits on their investment on a semi-annual basis. Minimum amount for a bid has been set at Tk 10,000 in face value or any multiple amount.

Any banks and financial institutions maintaining a current account with Bangladesh Bank can submit bids in the auction. Other investors who are interested to invest in Sukuk will have to submit bids through banks and financial institutions having current accounts with Bangladesh Bank.

At present, the Sukuk is transferable at face value. The Sukuk will be tradable after the completion of the 1/3rd portion of the project, which will be notified by Bangladesh Bank.

Shariah-based Islamic banks, financial institutes and insurance companies will have a quota of 70 percent, Islamic branches and windows of conventional banks of 10 percent, conventional banks and other financial institutes of 15 percent and individual investors of 5 percent.

In any case, if the bid of any investor category is less than the stipulated amount, the Sukuk amount will be allocated among other investors based on the decision of Sukuk Auction Committee, says the BB.

Bids quoting desired investment amount should be submitted in prescribed form (Annex-1) through e-mail ([email protected], CC: [email protected]) from 10am to 12pm on the date of auction. The result will be announced by 3:30pm on the same day.