5th investment Sukuk coming, expats can participate with foreign currency

The government is set to introduce the 5th Bangladesh Government Investment Sukuk (BGIS) in March this year, offering investment opportunities for both banks and individuals.  

The sukuk will allow both resident and non-resident Bangladeshis (NRBs) to invest, with NRBs having the option to invest with both local and foreign currency along with the perk of repatriating the invested amount and the profit earned if they desire.

The central bank issued a press release in this regard on Thursday (23 January), stating that it plans to issue the Social Impact Sovereign Sukuk, BGIS-5, worth Tk3,000 crore for the project titled "Construction of Important Bridges on Rural Roads Phase 2 (CIBRR-2)".

A senior official from the central bank told The Business Standard, "The BGIS-5 structure has been finalised on Thursday by the Technical Committee at the request of the Ministry of Finance and it will be offered soon.

"The sukuk's structure stands out with its unique focus, as it has been specifically designed to attract individual investors and expatriates. The targeted approach reflects a strategic effort to broaden the scope of sukuk investments, promoting inclusivity and encouraging greater participation from these key demographic groups."

According to the Bangladesh Bank release, the Sukuk will allocate 70% of its total value to Shariah-based banks, financial institutions, and insurance companies.

Another 10% will be allocated to the Islamic branches and windows of conventional banks, while the remaining 20% will be reserved for individual investors, provident funds, deposit insurance schemes, and others.

However, if the required subscription is not met within these categories, the remaining sukuk will be redistributed proportionally, said the release.

The release also stated that resident individual investors can invest through their local bank accounts. Non-resident individuals or institutional investors can participate using non-resident foreign currency accounts or non-resident taka accounts with any bank operating in Bangladesh. 

Additionally, expatriates can repatriate both their invested capital and profits to their home countries if they desire, the release added.

The CIBRR-2 project, against which the sukuk will be issued, aims to improve rural road connectivity and the socio-economic conditions of the project area, increase agricultural production, facilitate the transport of agricultural and non-agricultural goods while reducing costs, and ensure both short- and long-term employment opportunities.