STAR BUSINESS REPORT

The Bangladesh Bank (BB) has increased the share of Sukuk earmarked for Islamic banking operations to 80 percent, up from 70 percent, as part of its broader push to deepen Shariah-compliant finance.

The revised allocation applies to Islamic branches and windows of Shariah-based banks, financial institutions, and insurers, as well as Islamic units within conventional banks, according to a circular issued yesterday.

Meanwhile, the share reserved for conventional banks, financial institutions, and insurers has been reduced to 5 percent from 10 percent.

The remaining 15 percent, down from the previous 20 percent, will be offered to individual investors, provident funds, mutual funds, gratuity funds, deposit insurance schemes, investment companies, and similar institutions.

Sukuks are Shariah-compliant financial certificates, often described as the Islamic equivalent of bonds.

The banking regulator also outlined the procedure for the allocation process.

If bids exceed the prescribed ceiling in all three categories, allotments will be made to bidders in each group in proportion to their submitted bids.

However, if bids fall short of the quota in any category, the unsold Sukuk will be distributed among bidders in the remaining categories, prioritising higher bidders, in proportion to the size of their submitted offers.

Since the introduction of sukuk in December 2020, the government has issued six Shariah-based bonds.

The outstanding amount of sukuk increased to Tk 24,000 crore as of May this year, according to BB data.