Govt Issues Rs 3 Billion in Savings Bonds for Internal Borrowing

The Public Debt Management Office (PDMO) has opened subscriptions for two savings bonds worth a total of Rs 3 billion as part of the government’s domestic debt-raising plan.

The PDMO has issued the Citizen Savings Bond 2087 with a total size of Rs 2.5 billion and the Foreign Employment Savings Bond 2087 worth Rs 500 million. Both instruments have a maturity period of five years, and applications can be submitted until December 11.

The annual interest rate has been set at 6.5 percent for the Citizen Savings Bond and 7.5 percent for the Foreign Employment Savings Bond. Interest payments will be deposited into the investor’s bank account every six months.

Investors can purchase a minimum of Rs 10,000 worth of the bonds, while the maximum purchase limit is capped at the total issuance amount divided by Rs 10,000.

Nepali citizens and non-resident Nepalis (NRNs) are eligible to subscribe to the Citizen Savings Bond. The Foreign Employment Savings Bond is open to Nepali citizens and NRNs currently employed abroad or those who returned from foreign employment within the past six months. Applications can be filed through the PDMO’s DOMS system and investor portal.

According to Prakash Pudasaini, Under Secretary at the PDMO, applications worth Rs 800 million have been received for the Citizen Savings Bond in the first four days of the subscription period. The bonds will be allotted on a first-come, first-served basis.

Pudasaini said that savings bonds offer high liquidity because banks and financial institutions are required to purchase them in the secondary market, allowing holders to sell the securities at any time. He added that the bonds can also be used as collateral to obtain loans from banks and financial institutions. -- RSS