Bangladesh Bank Devises Sukuk Quota, Asks National Board of Revenue to Grant Concessions

Bangladesh Bank (BB) intends to introduce a separate quota for Sukuk; however, the volume or percentage is yet to be confirmed. A BB official from the Debt Management Department has hinted that it could be 40%-50% for Islamic banks or for the Islamic banking windows of other banks. BB has also asked the National Board of Revenue (NBR) to categorise profits earned by individual investors from Islamic bonds as tax-free income. The NBR is yet to respond.

Why it matters?

Amidst growing demand for Sukuk, BB is determined to make it an attractive choice to investors and the introduction of the quota system will contribute towards the development of the Islamic finance industry in Bangladesh. Further, investors currently pay tax annually against income from...