Staff Reporter :
In a bid to strengthen the Islamic finance ecosystem, Bangladesh Bank has increased the allocation of government-issued Sukuk to Islamic banking branches and windows from 70 per cent to 80 per cent.
The revised allocation, announced in a circular on Sunday, aims to boost market participation among Shariah-compliant institutions and promote the use of Islamic financial instruments across the country.
The new distribution will benefit Islamic branches and windows of Shariah-based banks, non-bank financial institutions (NBFIs), and Islamic insurance providers.
Conventional banks operating Islamic banking windows will also be eligible for the increased share.
As part of the adjustment, the allocation for conventional banks, finance companies, and insurance firms without Islamic operations has been reduced from 10 per cent to 5 per cent.
The remaining 15 per cent-down from the previous 20 per cent-will be open to a wide range of institutional and individual investors. These include provident and gratuity funds, mutual funds, corporate entities, deposit insurance schemes, and investment firms.
Sukuk are Shariah-compliant financial certificates that provide returns to investors without contravening Islamic law, serving as an alternative to conventional interest-bearing bonds.
To ensure equitable distribution, the central bank has introduced a proportional allocation mechanism. In cases where investor bids exceed the available quota within any category, Sukuk will be allotted based on the relative size of bids submitted by participants in that group.
The move reflects Bangladesh Bank’s ongoing commitment to expanding the Islamic finance sector, which continues to play an increasingly important role in the country’s financial landscape.
