Bangladesh's sukuk boom hasn't built a real Islamic capital market

Bangladesh's sovereign sukuk programme has raised roughly Tk 53,000 crore since its first issue in December 2020, and a Daily Star analysis (reported by IANS on 1 July) argues it has still failed to build a real Islamic capital market. The critique is structural: nearly every issue is a sale-and-leaseback of assets the state already owns — 'asset-based' sukuk, where investors rely on the government's promise to repurchase, rather than 'asset-backed' sukuk, where investors genuinely own the asset and share its risks and returns. The Islamic label sits on what is functionally conventional government debt. The report's prescription is the harder path: use sukuk to finance genuinely new, income-generating assets — roads, ports, power plants, schools — issued across a range of maturities without buy-back clauses, so the instrument scales with development needs and establishes a benchmark yield curve. The distinction matters far beyond Dhaka: it is the difference between renaming a debt market and actually building an Islamic one.

This is a QeRN summary by Ahmed Qerni. Read the original at IANS: https://ianslive.in/bangladeshs-sovereign-sukuk-fails-to-build-islamic-capital-market-report--20260701185511.