This document provides an overview of Islamic bonds (Sukuk) from the perspective of Bangladesh. It defines Sukuk as certificates representing ownership in tangible assets or services based on the Accounting and Auditing Organization for Islamic Financial Institutions. The document discusses the legality of various Sukuk structures and compares Sukuk to conventional bonds. It also reviews Malaysia's leadership in the Sukuk market and guidelines for Sukuk issuance in Bangladesh, including the country's first sovereign Sukuk in 2020. The document concludes by discussing prospects and challenges for financing major projects in Bangladesh through Sukuk.

1. “An overview of Islamic Bond (Sukuk): Bangladesh Perspective”

2. The Concept of Sukuk
The word "sakk," means "certificate
Sukuk means "order of payments"
The word “Sukuk,“ came from the word “Sakk”

3. The Concept of Sukuk
AAOIFI says that Sukuk are "certificates of equal value representing undivided shares in ownership of
tangible assets, usufruct and services, assets of particular projects or special investment activities"

4. The legality of Sukuk
Bai' al-dayn
Contemporary scholars allow the bai' al-dayn when a securitized financial instrument
mixes real asset ownership with financial investments payable

5. The legality of Sukuk
In the verse 282, Surah al-Baqarah, Allah SWT says,
"O you who believe! When you do business with each other and have
obligations in the future at a certain time, put them in writing"

6. The inevitability of
Sukuk
Performance and profit are stable
Most potential solutions to fill the funding gap
Favorable impacton long-term economic development
Mitigates negative effects of religious exclusion
Globally accepted Islamic financial tool

7. Conventional
Bond
Sukuk
The issuer of these
bonds is only
obligated to refund
the principal and
agreed-upon
interest. Whatever
earnings the firm
may have made are
fully and alone
owned by the issuer.
The issuer of this
instrument provides income
to its holders against a
specific trade or lease of
assets or other types of
instruments available. No
fixed payment is made to
the holder and the holder
bears proportionate loss
from the trade, if any.
The Discrepancy Between Sukuk and Bond

8. Sukuk experience of an Asian country
Malaysia is global
standard of Sukuk
issuance and appealing
issuance center for
international market
Malaysian Sukuk
market: RM 718.4
billion, Annual average
growth rate:13%
Global sukuk
market: $109
biliion (2020)
CB of Malaysia:
Shariah treasury
bond, 1983
Government: Sovereign
sukuk (RM 600 million),
2002
Shell MDS: First sukuk in
the world (RM 125 million),
1990

9. Primary issue
Shariah Advisory
Committee
Secondary issue
Special purpose
vehicle or trustee
Periodic profit
distribution
Originator
and
Eligibility
Sukuk issuance guideline by Bangladesh Government

10. Bangladesh Government Investment Sukuk
01 02
03 04
SPV-Bangladesh bank
Trustee- Bangladesh bank
Maturity- 5 years
Per value: 100tk
Distribution- 1st phase 4000 crore -
auction was held in 2020 December 28 –
Total bid 15000 crore
Total participant 37 banks and 2
individuals
Sonali Bank got 26.4 % as highest bidder
2nd phase 4000 crore - auction was held
in 9 June 2020- Total bid 32726 crore
Objectives
Safe Water Supply for the Whole Country
Project cost 8,851 crore taka
Sukuk collection 8000crore
Govt. investment 851 crore
Return
Total profit 4.69%
Where, benchmark return
3.69% (BGIIB) & margin 1%
Semi-annual profit

11. Beximco Green-Sukuk Al Istisna
01 02
03 04
Introduction: 23 June 2021.
Asset-Backed Green-Sukuk
Originator - Beximco Limited
Trustee-ICB
Issue Managers: City Bank Capital
Resources Limited & Agrani Equity and
Investment Limited
Convertibility : 20% convertible per annum
Maturity: 5 years
Listed in : DSE & CSE
Distribution
3000 crore
50% private placement
25% existing shareholders
25% public issue (Subscribed only 56%)
Per value 100tk
Profit distribution
9 % annual rate
Dividend provision 1%
Semi-annual profit

12. ICB 1st Mudaraba Sukuk
Status: under precession
Fund collection: 1000 crore
Maturity: 10 years
Expected return: more than or equals
to DSE Islamic Shariah index

13. Prospects of Financing through Sukuk in Bangladesh
Huge Infrastructure Gap
Favorable
Macroeconomic
Conditions
Success of
Islamic Banking
Excess Liquidity of
Islamic Banks
Favorable
Country Rating

14. Issuance of Sukuk in Different Countries
1970s
Jordan
1983
Malaysia
1988 OIC
1990 Malaysia
(Success)
2000 Sudan
2001 Bahrain
2002 Malaysia
(International
Sukuk)

15. Use of Sukuk in Mega Project in Bangladesh
Buy Back the
Sukuk at FV
Distribute
the Profit
Invest in the
Project
Raise
Capital
Offer Sukuk
Certificates

16. Challenges of Sukuk in Bangladesh
Human Resource
Development
Adoption of Programs
for Human Resources
Development
Islamic Shariah
Governance
Standardization of
Sukuk
Inviting International
Assistance
Fiscal Incentives and
Awareness Programs