KATHMANDU, July 5: Nepal Rastra Bank (NRB) is going to issue development bonds worth Rs 10 billion on July 6. The government has been using development bonds as a tool to raise internal debt.
On behalf of the government, NRB is about to issue Development Bond 2086 Cha through auction. This six-year development bond can be purchased by banks and financial institutions, non-bank financial institutions, insurance companies, organized institutions and the general public. The interest rate of this bond will be determined through negotiations and the interest rate will be paid semi-annually, according to NRB.
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This bond can be secured as a loan. According to NRB, 85 percent of the issued amount of bonds will be sold competitively and 15 percent non-competitively. “If full bids are not received for the amount allocated to non-competitive bidders, the remaining amount will be sold to competitive bidders. If more bids are received than the amount allotted to the non-competitive bidders, the amount of the bond will be distributed proportionately to the bidders,” said the notice of NRB.
Similarly, while determining the interest rate, the interest rate accepted by the bidders will be arranged in ascending order, and the cutoff interest rate will be maintained as a single interest rate until the amount to be distributed.
It is said that loans will be provided at a fixed interest rate. For debentures, it is possible to apply for the points that leave the remainder when dividing by 50,000 without increasing the limit of the total amount issued.
