Banks allowed to invest their entire special fund in Sukuk
The Bangladesh Bank (BB) on Monday facilitated banks to invest their entire Tk 200 crore special stocks fund in Shariah-compliant Sukuk (bond), including Beximco's Tk 3,000 crore Sukuk.
The approval of the central bank came at a time when the country's Sukuk - Beximco Green Sukuk al Istisna'a, approved by Bangladesh Securities and Exchange Commission (BSEC), was struggling to attract investors.
Of Tk 3,000 crore Sukuk, Tk 750 crore is supposed to be raised through initial public offering and the remaining Tk 2,250 crore is supposed to be raised through private placement.
Even after the expiry of the first two deadlines for the Sukuk's IPO, the subscription reached only 7.42 per cent, prompting the issuer of Sukuk to seek another phase of time extension for the IPO subscription.
Monday's BB circular said the changes were made with a view to bringing new investment instruments and thereby bringing diversity to investments to reduce investment risks.
The entire amount of Tk 200 crore in special fund at each bank can be invested in 100 per cent asset-backed green Sukuks having at least 70 per cent of their fund in solar power, hydropower, wind power projects and in other sources of renewable energy projects.
To enjoy the investment facility, Sukuk must have to be enlisted on the stock exchanges or would be enlisted in one year of subscription closure on the stock exchanges, the BB circular said.
It said the investments in Istisna Sukuk, Salam Sukuk and Ijarah Sukuk or in combustion of the three Sukuks would be allowed. Banks also have to follow the other conditions mentioned in the BB circular in investing the fund in Sukuk.
Beximco Green Sukuk al Istisna'a issued by Beximco Green-Sukuk Trust as asset backed Shariah compliant security and the proceeds received from the subscription will be utilised for solar projects of Teesta Solar Ltd and Korotoa Solar Ltd.
Apart from the waiver for Sukuk, the BB said that other conditions for making investments from the stock market special fund would remain unchanged.
In case of investments in such Sukuk, the capital market special fund can be used till December 31, 2028, a separate BB circular said.
For the investments in other scrips of the stock market, the validity of the fund would remain unchanged and the fund would remain valid till February 2025.