KARACHI: The government will borrow around Rs50 billion through sales of instruments to Islamic financial institutions, a statement said on Friday.
The State Bank of Pakistan (SBP) will invite tenders on December 20 for sale of three-year government of Pakistan Ijara Sukuk (GIS) from the designated primary dealers, according to the communique issued by the central bank.
The maximum value of the asset under the present issuance programme of the Ijara Sukuk is Rs234.6 billion, the communique said.
The central bank said that Ijara Sukuk will be issued in accordance with the provisions of the notification of the GoP Ijara Sukuk Rules, 2008. While the highway land together with all constructions and improvement thereon (M-2) (Assets) has been identified as the proposed assets to facilitate issuance of the Sukuk, it added.
The valuation of the asset will be carried out by at least two Pakistan Bankers Association (PBA) approved independent valuators and the lower of the two valuations will be used to determine the sale price of the assets.
The assets are owned by the government of Pakistan, while the title to the assets is currently held by the Pakistan International Sukuk Company Limited (PISCL) as trustee for the government of Pakistan.
The government of Pakistan owns the assets since it purchased the same from International government of Pakistan Ijarah Sukuk Holders in 2010, it said.
Ijarah Sukuk of over Rs182 billion have been issued between October 2010 and June, which facilitated this shift from financing to high quality sovereign investments, enabling Islamic banking institutions to invest as much as 83.7 percent of their incremental assets in the government securities during H1-CY11, according to the Financial Stability Report for the first half of 2011, released by the State Bank of Pakistan.