• Wednesday, Oct 16, 2019
  • Last Update : 12:50 am

SIBL wants to invest $2mllion in overseas private equity fund

  • Published at 03:36 pm October 23rd, 2017
SIBL wants to invest $2mllion in overseas private equity fund
The Social Islami Bank Limited (SIBL) has requested the Financial Institutions Division (FID) to allow it to invest $2 million in a real estate-based private equity fund managed by the Islamic Development Bank (IDB). Md Razaul Islam, general manager of Bangladesh Bank's Foreign Exchange Investment Department, wrote to FID secretary seeking his opinion. SIBL Managing Director Shahid Hossain had earlier sent a letter to the Foreign Exchange Investment Department seeking permission to invest abroad. The bank plans to buy 200 shares of Awqaf Properties Investment Fund (APIF) for $10,000 each. A 2% stake in the fund will be enough to give SIBL a seat on the APIF board, according to the Bangladesh Bank letter sent to FID Secretary Md Eunusur Rahman. Established in 2001, the APIF's objective is to develop and invest in accordance with principles of Islamic Shariah in Awqaf real estate property that is socially, economically and financially viable in member countries of IDB and Islamic communities in non-member countries. Awqaf real estate property is dedicated to charitable or Islamic religious purposes with no intention of the donor reclaiming the assets. Once donated, the property cannot be sold or transferred from one party to another. The central bank’s letter also said that the local financial institution will gain experience of handling big portfolio investment. SIBL MD Shahid’s letter said that APIF, established under specific regulations managed by IDB to revive the Islamic Sunnah of Awqaf by developing Awqaf Properties around the world to increase their returns, contribute to socio-economic development of the Muslims and non-Muslims as well. The fund is invested in conformity with the Shariah in financially viable projects for the development of Awqaf real properties in the OIC (Organisation of Islamic Cooperation) member countries. SIBL claimed that participating in the APIF equity would benefit it in various ways. “It will be an active member of the Supervisory committee and will share with ongoing property management in order to optimise the facilities delivered to Awqaf customers and enhances the returns to investors and eventually to the beneficiaries of the waqifs,” the letter read. SIBL’s presence on APIF board, as the first-ever member from Bangladesh, will brighten the image of the bank and the country, it added. It claimed that at one stage its operational efficiency for managing extensive portfolio and finding innovative ways to economic development by sharing with technical assistance to be used for preparing feasibility studies, concept and preliminary design of qualifying project. SIBL will get 90% of net income per certificate apart from yearly dividend, according to SIBL MD letter. FID Secretary Rahman told the Dhaka Tribune that they would place a proposal before the Cabinet committee on Economic Affairs to allow local companies invest aboard after discussions with Finance Minister AMA Muhith. “We will discuss SIBL’s proposal if the Cabinet committee approves the proposal,” the banking secretary said. In Bangladesh, APIF will construct two towers and a multipurpose building for Anjuman Mufidul Islam in Dhaka and a university in Chittagong, with a total investment of $100 million.