Fifth sukuk oversubscribed by three times as govt raises Tk 3,000cr

markediumMarch 15, 20251 Mins read403

Fifth sukuk oversubscribed by three times as govt raises Tk 3

The government has successfully raised Tk 3,000 crore through its latest sukuk issuance, receiving an overwhelming response from investors. The initiative, aimed at funding the construction of bridges to enhance rural connectivity, saw bids totaling Tk 10,925 crore, significantly surpassing the target stated in a report.

The auction involved 7-year bonds, with the highest share of Tk 2,144 crore allocated to Shariah-based banks. These banks had submitted 10 bids amounting to Tk 5,663 crore. Conventional banks with Islamic branches and windows secured the second-highest allotment, followed by individual investors and provident funds.

The sukuk, a Shariah-compliant financial certificate similar to a treasury bond, offers an annual return rate of 9.25 percent. The government initiated this fund-raising effort to facilitate the construction of bridges connecting rural roads, thereby aiming to boost agricultural productivity and improve socioeconomic conditions at the grassroots level.

This latest auction marks a cumulative collection of Tk 22,000 crore through sukuk issuances. Since its inception in December 2020, the sukuk program has enabled the government to raise Tk 19,000 crore over four years for various development projects.

The current issuance, titled CIBER-2 socioeconomic sukuk, is dedicated to the “Construction of Important Bridges on Rural Roads” project. Launched in 2017, the Tk 6,500 crore initiative is scheduled for completion by June 2026. The project is expected to significantly enhance rural road communication and contribute to broader socio economic development.

In an effort to attract high-net-worth individuals, the government recently increased the proportion of sukuk subscriptions reserved for individuals, provident funds, and deposit insurance from 5 percent to 20 percent. This strategic move aims to diversify the investor base and promote inclusive participation in national development efforts.

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