The government raised Rs 46.44 billion by issuing Ijarah Sukuks under the new series started in October 2022 in order to finance the budget deficit and encourage Shariah-compliant banking in Pakistan.
Meezan Bank Senior Executive Vice-President and Head of Shariah Compliance, Ahmed Ali Siddiqui told the media, Under the new series, the government has started issuing Ijarah Sukuk bonds against the assets of the National Highway Authority (NHA).
The Ijarah Sukuks are Shariah-compliant bonds.? Islamic institutions get Sukuk from the government, which they then rent to the government to. generate income The most recent rental Sukuk is a variable bond with a five-year maturity. The most recent transaction was led by Meezan Bank, Al Falah Islamic Bank, and Dubai Islamic Bank in their capacity as joint financial advisors to the Ministry of Finance.
The government may issue Sukuk worth around Rs 600 billion against the NHA assets over the next few months, Siddiqui estimated.
As the government has targeted issuing Sukuk bonds worth around Rs 1 trillion in the current fiscal year 2023, he said, adding it might find new assets to issue more Sukuks in the next series later.
Moreover, the finance ministry has issued Sukuks of Rs 160 billion in the present fiscal year started July 1, 2022, comprising the latest one worth Rs 46.44 billion.
While during the previous series, in April September 2022, the government issued Sukuks of Rs 624 billion against the Civil Aviation Authoritys (CAA) assets, including Lahore, Karachi, and Islamabad airports.
It was reported that the government had so far issued the Shariah-compliant bonds costing Rs 3.7 billion, comprising the one that matured, since the first Sukuk was issued in 2008 in Pakistan.
Sources reported that the outstanding amount of Sukuks in place is expected to be nearly Rs 2.44 trillion. The outstanding value of Sukuk is almost equal to a little over 12% of the domestic debt raised from local banks while the remaining slightly less than 88% (Rs 17.48 trillion) of debt was raised through conventional banks.
Last year, the government aimed to increase bank debt from Shariah-compliant banks to 10% in its medium-term plan.