NRB issuing development bonds worth Rs. 10 billion

By A Staff Reporter,Kathmandu, Sept. 9: Nepal Rastra Bank (NRB) is all set to issue development bonds worth Rs. 10 billion with a maturity period of six years.

The central bank is going to issue the development bond of Rs. 10 billion to the government to raise the required domestic loan. 

The bond “Development Bond 2086 Jha” will be issued through both competitive and non-competitive bidding, according to a notice issued by the Monetary Management Department (MMD) of the NRB.

Banking and financial institutions, non-banking financial institutions, insurance companies, organised groups and the general public can apply for the bond.

The bank said that the interested parties need to submit their bid documents through the Online Bidding System Software of the NRB by 3 pm Sunday (September 10, 2023).

The bond, which will be allocated on Monday (September 11, 2023), will mature on September 10, 2029.

Interested parties can apply for the bonds ranging from Rs. 50,000 to the amount not exceeding the size of the total issue divisible by Rs. 50,000.

In total, 85 per cent (Rs. 8.5 billion) of the bond amount is allotted for competitive bidders while the remaining 15 per cent (Rs. 1.5 billion) is set aside for the non-competitive bidders, read the bank’s notice.

The banks and financial institutions possessing the licenses of A, B, and C categories are not eligible to apply for the non-competitive bidders, according to the notice.

The interest rate of the bond will be determined after reviewing the interest rates proposed by the participants of the competitive bids.

The applicants must also deposit 2.5 per cent of the bid amount on the central bank’s account as urgent money, in addition to submitting the deposit voucher to MMD by 3:00 pm by Sunday.

The NRB said that it would refund money to the bidders who are not selected or the amount exceeding the required allotment within seven days of their allotments without any interest.

The bondholders can take loans as collateral. 

The secondary trading of the bond will be transacted through the Nepal Stock Exchange (NEPSE).

 The development bond is part of the domestic debt, which the government plans to mobilise so as to make up for the deficit in its budget.