News Column

Govt to issue another Ijara Sukuk

June 18, 2014

The State Bank of Pakistan (SBP) said on Tuesday another GoP Ijara Sukuk would be issued as per the transaction structure in accordance with provisions of Ijara Sukuk Rules, 2008,.

The SBP, in a circular, said as per transaction mechanism, profit on the GOP Ijara Sukuk would be based on the followings:

1- Rental rate benchmarked against the latest weighted average yield of the six-month Market Treasury Bills or 6 month PKRV (as per FSCD circular 13 of September 06, 2008).

2- The rental rate as mentioned above may be adjusted based on the difference between estimated supplementary rental and actual maintenance expenses of the underlying asset.

The SBP also decided that for this particular issue of GIS (M-3), the total auction participation of a single PD would be capped at whichever is the lower of the following: a) PKR 25 billion or b) 20% of Total Demand & Time Liabilities-Islamic (excluding FE-25 deposits) of the respective PD Islamic bank / Islamic window of that particular PD.

For this purpose, Total Demand & Time Liabilities : Islamic as of March 28, 2014 will be used as reported to the State Bank of Pakistan.

In case any PD breaches the aforesaid limit, SBP reserves the right to cancel all or some of the bids of the concerned bank.

All Islamic banks and commercial banks with Islamic Branches have been designated as primary dealers for participating in the auction of GOP Ijara Sukuk.

All designated primary dealers for the GOP Ijara Sukuk are advised to ensure meticulous compliance with the above instructions.

All other instructions on the subject shall, however, remain unchanged, the SBP said.

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Source: Balochistan Times (Pakistan)

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