Nepal Rastra Bank (NRB) is issuing debentures worth Rs 20 billion.

Kathmandu. KATHMANDU: Nepal Rastra Bank (NRB) is set to issue Rs 20 billion debentures 2084 BS. The bank’s Monetary Management Department is issuing the debentures with a maturity period of 1 year.

According to a notice published by the bank, the bidding process will be held till 3:00 pm on July 7 through an online bidding system software. Only the ‘A’, ‘B’ and ‘C’ class banks and financial institutions licensed by Nepal Rastra Bank are eligible to participate in the program.

Interested organizations can apply for a minimum of Rs 5 crore and a maximum of Rs 5 crore. The interest rate of the debentures will be determined through bidding.

The principal will be paid on July 7, 2084 and the interest will be paid half-yearly. Interested bidders can bid at multiple interest rates. The bank has set the process of selling debentures by maintaining a single interest rate at the point up to the amount called by placing tenders in a small to large interest rate.

The bonds can also be used as collateral by banks and financial institutions. Although it cannot be counted as mandatory cash reserves, it can be counted in terms of legal liquidity ratio and net liquid assets, the central bank has clarified. In addition, there should be sufficient deposit in the account of the concerned institution for payment of the approved bid amount.

If the bid amount is canceled due to lack of stock, the concerned institution will be fined 2.50 percent of the approved amount and will be banned from participating in any bidding for six months.