The government is taking a loan of Tk10,000 crore from Sammilito Islami Bank. For this, a 10-year Shariah-based Sukuk (Islamic bond) is being issued.

This is the largest investment so far for the newly formed bank, where the government will get 9.75% profit per year.

Bangladesh Bank said that on January 7-8, the Shariah Advisory Committee formed under the chairmanship of central bank's deputy governor Md Kabir Ahmed held a meeting on the issue of Sukuk.

In the meeting, the members agreed to issue this Sukuk through the lease method.

Seven housing projects of the Public Works Department for government employees and some specific train services of Bangladesh Railways have been taken as the basis of this Sukuk.

This Sukuk, named 'Bangladesh Government Special Sukuk-1', will be issued directly to the bank through the private placement method. The government will receive Tk10,000 crore from the bank on January 14.

Sector stakeholders said that through the Sukuk issue, the government will be able to raise a large amount of money for development projects as well as create interest-free long-term funds.

At the same time, it will serve as a safe investment opportunity for the Islamic banking sector.

The reason behind the formation of Sammilito Islami Bank is the previous crisis. During the previous Awami League government, there were cases of fraudulent withdrawal of loans from several banks. As a result, those banks gradually fell into deep crisis.

In this situation, the Sammilito Islami Bank was formed by merging five banks in crisis — Exim, Social Islami, First Security Islamic, Global Islamic and Union — together.

The paid-up capital of the bank has been set at Tk35,000 crore. Of this, the government is providing Tk20,000 crore and the remaining Tk15,000 crore will come from the shares of depositors. The authorized capital has been kept at Tk40,000 crore.

According to Bangladesh Bank, five banks currently have about Tk142,000 crore in deposits from 7.5 million depositors. The amount of loans against it is Tk193,000 crore, a large part of which has already defaulted.

These banks have 760 branches, 698 sub-branches, 511 agent banking outlets and 975 ATM booths across the country.

After the merger, multiple branches in the same area will be merged into one or two.

In addition, the salaries and allowances of employees have been reduced by 20% to reduce operating costs.