One more bank decides for the issuance of debenture; NIB comes forward with a debenture of Rs 2 arba

Nepal Investment Bank Limited has decided to issue debenture worth Rs 2 arba. The tenure of the debenture will be seven years. The annual interest rate has been quoted to be 10.5% by the bank.

The increase of capital directly impacts return on equity of any bank. On the contrary, with the issuance of debenture, banks can pay a fixed interest. Due to this flexibility of debentures, Nepalese commercial banks are more into issuance of debentures lately. Furthermore, Nepal Ratra Bank has facilitated to issue debenture for the hundred percent of the core capital.

Besides, NIB Bank Limited, NIC Asia, Sanima Bank and Siddhartha Bank are also in the pipeline for the issuance of their debenture.