The government on Thursday issued special bonds worth Tk 30.16 billion to cover bank debts accrued on fertiliser-subsidy arrears, officials have said.
The finance division signed two separate memorandums of understanding (MoUs) with two banks, fertiliser importers and the ministry of agriculture for the issuance of the bonds.
Officials said Tk 25.57 billion special bonds were issued in favour of state-owned Sonali Bank PLC and the IFIC Bank PLC was given Tk 4.59 billion worth of bonds.
The government decided to issue the special bonds as it failed to pay subsidy arrears to independent power producers and fertiliser importers amid severe fall in revenue earnings, they said.
The rate of interest of the bonds will be equal to the repo rate of Bangladesh Bank. The tenure of the bonds will vary based on the discussion with the banks, preferably 8 to 10 years.
Once the bonds are matured, the government will take back the bonds by paying both interest and the principal amount.
The banks will be able to maintain their Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) with the bonds issued in favour of them.
The government will issue bonds worth Tk 255 billion in favour of 40 banks to settle the unpaid subsidy-linked debts, according to officials concerned.
Until June last, the subsidy arrears for fertiliser and power sector stood at Tk 429 billion, including bank loans Tk 255 billion - for power producers Tk 150 billion and fertiliser importers Tk 105 billion.
Finance Division Secretary Dr Khairuzzaman Mozumder did not respond to a call for a comment on the issuance of the bonds.
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