Nepal Rastra Bank To Issue 5-Year Development Bonds to Secure Internal Loans of 7 Arba Rupees

Nepal Rastra Bank (NRB) has announced the issuance of development bonds worth Rs. 7 arba to mobilize internal loans. The central bank is set to sell 2085 Ta of 5-year development bonds, aiming to raise essential funds for government initiatives.

Banks and financial institutions, non-bank financial institutions, insurance companies, organized organizations, and Nepali citizens are invited to participate in this internal financing endeavor. Applications for the purchase of bonds, to be sold through an oral process, should be submitted to the Public Debt Management Department of Nepal Rastra Bank.

Prospective buyers can choose to participate competitively or non-competitively. Competitive buyers have been allocated a significant portion, 85% of the total issued amount, equivalent to 5.95 arba rupees, while non-competitive buyers have been earmarked 15%, amounting to 1.05 arba rupees.

To partake in the auction, interested investors must submit their bids through the online bidding software by 2 pm on Poush 5. The bond denomination ranges from a minimum of 50,000 to a maximum of 50,000, ensuring flexibility within the specified limit of the issued amount. The bonds are scheduled to be issued on the 5th of Poush, with the principal repayment set for the 6th of Poush 2085.

The interest rate for these development bonds will be determined through negotiation, with semi-annual interest payments, as outlined by Nepal Rastra Bank. Furthermore, the bonds can serve as collateral for obtaining loans from banks and financial institutions, providing an additional avenue for liquidity.

Nepal Rastra Bank's initiative to sell development bonds underscores its commitment to managing internal debt effectively, supporting governmental initiatives, and providing investment opportunities for various stakeholders in the financial landscape.