The government has introduced two-year treasury bond and
re-issuance process for existing T-bonds.
A finance ministry notification issued on April 11 said from now on five types of bonds — 2 years, 5 years, 10 years, 15 years and 20 years — would be sold.Bangladesh Bank would issue Tk 720-crore two-year bonds initially to attract more investment in the financial market, said BB officials.
They said banks and financial institutions would use their additional liquidity to purchase the bonds to get good return. Currently, the rate of interest on investment in all types of bond is around 12.50 per cent.
They also said the primary dealer banks and non-PD banks were usually reluctant to invest in long-term treasury bonds as their liquidity turned into an idle asset for a long time.
The notification said that the government could reopen existing bonds for issuing those again to raise additional amounts.
The reissued bonds will be open at face value and have the same maturity date, coupon rate and coupon payment date as before.
The bonds can be reissued through multiple priced based auctions where the bidders can quote price with premium, at per, or discounted rate on Tk 100 face value.
All the bids for reissued binds will be arranged in descending order and an auction committee will finalise the price quoted by the bidders. The auction committee will accepts the bids based on the highest quoted price with the lowest yield.
The face value amount of the sale proceed of reissued bonds will be deposited in the government’s account with Bangladesh Bank but the premium amount will be deposited in separate account.
The interest of the reissued bonds will also be deposited in separate account.
The finance ministry notification also allowed the non-resident Bangladeshis to sale the treasury bonds anytime to any Bangladeshi national living in the country or abroad.
Previously, the NRBs were not allowed to sale the treasury bonds within one year from issuance.
-With New Age input
