11.5 C
Munich
Saturday, October 1, 2022

Public Debt Act gets update for sovereign bonds, Sukuk

Must read

The government published the gazette for Public Debt Act, 2022 on Tuesday.

The new act, replacing Public Debt Act 1944, incorporated clauses for sovereign bonds and Shariah-compliant securities.

In the absence of necessary clauses in the previous act, the government had to rely on executive orders for its borrowings.

The new act incorporates clauses related to the state’s guarantee against debts issued by its various entities.

National savings certificates will also be governed by the act.

A clause for a depository of the government securities has been included in the act, while the government will decide whether to create a separate depository or use the existing Central Depository Bangladesh Ltd (CDBL).

A clause for the creation of special purpose vehicles (SPV) for financing projects through asset-backed securities has also been included.

Capital market experts say the act will raise confidence of both local and foreign investors, and the government will gain a better response from them when it moves to issue sovereign bonds or Sukuks.

Exchange trading of government securities is crucial for the development of a vibrant market for debt securities, they added.

 

- Advertisement -spot_img

More articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisement -spot_img

Latest article