PDMO to issue bond for migrant workers offering 9% interest

By A Staff Reporter,Kathmandu, May 4:The Public Debt Management Office (PDMO) is issuing the Foreign Employment Saving Bond with 9 per cent interest rate.  The PDMO under the Ministry of Finance is set to issue the foreign employment saving bond worth Rs. 1 billion with a maturity period of five years.

The bond named ‘Foreign Employment Saving Bond 2086’ targets Nepali migrant workers, those who have returned from foreign employment, and non-resident Nepalis, according to a notice issued by PDMO.

Now the PDMO has started to raise domestic debt on behalf of the government. Earlier, the Nepal Rastra Bank (NRB) used to raise domestic debt issuing various instruments, including foreign employment saving bonds.

The Foreign Employment Saving Bond is one of the tools of the government to raise domestic debt to fund the budget deficit.

It is mentioned in the notice that Nepali citizens or non-resident Nepalis who are engaged in employment abroad and who have returned from employment abroad for less than six months can purchase it in their names or their family members (father, mother, husband, wife, son and daughter only).

The PDMO said that the eligible interested parties should apply through its online system from May 5 to June 4, 2024. Applicants can apply once or repeatedly within the notification period.

The bond will be allotted on June 11, 2024. The payment of interest will be made semi-annually. The tax applies to the earned interest income. The eligible parties can apply for bonds ranging from Rs. 10,000 to the amount not exceeding the size of the total issue divisible by Rs. 10,000.

The bonds are tradable in the secondary market while they can be pledged as collateral in banks and financial institutions for loans, according to the notice. The interest on the bonds will be paid every six months.