KATHMANDU, Dec 13: Nepal Rastra Bank (NRN) is issuing foreign employment saving bonds of Rs 500 million, targeting Nepalis working and residing abroad or those who have recently returned from foreign employment.

The central bank has been issuing foreign employment bonds since Fiscal Year 2009/10 in a bid to bring the foreign currency savings of Nepalis working abroad through formal channel and encourage them to invest in Nepal so that their capital could be utilized for ‘nation building’. The central bank is offering 10-percent interest rates on the bonds. Apart from Nepalis working or residing abroad, those who have returned from foreign employment not more than four months ago can apply for the bonds.

Though the foreign employment bonds are being issued every year, they have got only lukewarm response from the targeted community. But still, the subscription rate of the instrument is on an increasing trend in recent years. This bond has a maturity period of five years.

NRB issues the bonds each year as one of the instruments to raise domestic debt for deficit financing of the government budget. The government plans to raise a total of Rs 145 billion in domestic debt for deficit financing of the budget worth Rs 1,278 billion. Out of the total domestic debt, the central bank plans to tap the earning of Nepalis working abroad for Rs 1 billion.

According to the internal borrowing calendar of the NRB, it is issuing Rs 500 million worth of foreign employment bonds in the second quarter while Rs 250 million will be floated in each of the remaining two quarters of the current fiscal year. Those purchasing the bonds can get interest in every six month, while these instruments can also work as collateral to borrow loans from bank and financial institutions. The foreign employment bonds can be purchased by Nepali from 12 agents in Nepal. Six of the agents have their contact persons in countries where many Nepalis have gone for employment, including Qatar, Kuwait, UAE, Japan, Saudi Arbaia, Korea, Malaysia, Iraq, India, the US, and Israel, according to the NRB.

According to the NRB, a subscriber should apply for bonds of Rs 5,000 at the minimum while he/she can subscribe maximum bonds that can be divided by 5,000 up to the offer amount.

Nepali or NRNs who are abroad or have returned not earlier than four months from the subscription date can apply for the bonds under their own names or the names of family members. The bonds are up for sale until Friday (December 15). The bonds are scheduled to be allotted on December 20.

Source: Republica

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