Bangladesh Bank today lifted the bar on trading of a Sukuk bond in the secondary market at market prices.

Until now, banks and financial institutions were allowed to trade the bond termed ‘IRIDP-3 Social Impact Sukuk’ at a face value of Tk 5,000 crore.

The central bank said it relaxed the rule regarding trade of the Shariah-based bond at the prices determined by negotiated prices as 30 percent work of the Important Rural Infrastructure Development Project (IRIDP)-3 have been completed.

“We have cleared the way for trading the Sukuk bond at market prices since one of the criteria mentioned in the prospectus has been fulfilled,” said a senior official of the banking regulator.

Bangladesh issued its first sovereign investment sukuk – a Shariah-compliant bond-like instrument used in Islamic finance – in December 2020 in order to attract investment from Shariah-based Islami bank, financial institutions and individuals.

Until now, the government has raised Tk 18,000 crore through issuance of Shariah based Sukuk, similar to a treasury bond but structured to generate returns in compliance with Islamic finance principles.

By the end of last month, the banking watchdog fixed allotment quotas regarding investment in the bond.

It said Shariah-based banks, financial institutions and insurance companies will get 85 percent of the allocation.

Islamic branches and windows of conventional banks will get 10 percent and 5 percent will be allocated for individual investors, provident fund and deposit insurance schemes.