Nepal Rastra Bank to Issue Rs. 20 Billion in Central Bank Bonds

The Central Bank of Nepal has published another notice to issue bonds today, Previously in just a week ago NRB has issued 45 Billion, 35 Billion and 25 Billioni worth of bonds and now today worth of 20 billion totalling 125 billion in just four offerings to manage excess liquidity in the banks and financial institution.

The central bank bonds worth Rs. 20 billion will be issued for a duration of one year. According to the notice published by the central bank's Monetary Management Department, the bond named "NRB Bond 2084 'Gha'" will be issued on Asar 22, 2083.

Only licensed Class ‘A’, ‘B’, and ‘C’ banks and financial institutions are eligible to participate in the bidding process.

The interest rate of the bond will be determined through the bidding process, and the interest earnings will be paid out to investors every six months. The total principal amount will be paid back upon maturity a year later on Asar 22, 2084.

These bonds can be used as collateral for loans at NRB or other financial institutions. While the invested amount cannot be used to meet mandatory cash reserve rules, it can be counted toward statutory liquidity ratio requirements. The central bank also warned that if a winning institution fails to have sufficient funds in its account on the issuance date, it will face a 2.50 percent financial penalty and a six month ban from participating in future open market bidding processes.