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NRB to offer foreign employment bond
KATHMANDU: Nepal Rastra Bank is launching the second offering of foreign employment bonds for this year despite the scanty subscription of the first batch.
The central bank has announced the issue of Foreign Employment Bond 2075-Kha worth Rs 250 million, which will go on sale from mid-March. This time, NRB has launched the migrant worker targeted bonds in a phasewise manner.
The current batch of five-year foreign employment bonds targeted at Nepali migrant workers and non-resident Nepalis (NRNs) is being offered at nine per cent coupon rate. The issue will be open from March 19 to April 8.
In the previous fiscal years, NRB used to scramble at the last minute to sell the bonds at one go, which also affected its subscription.
Back in December, the government’s public debt manager, NRB had issued Foreign Employment Bond 2075-Ka worth Rs 250 million. The issue saw subscription of 10 per cent of the total offering in one month, which can be considered improved results when compared to previous issues.
The designated agents of Foreign Employment Bond 2074 — issued last fiscal year — had been able to sell bond units worth Rs 42.8 million of the total issue of Rs one billion. In fiscal 2011-12, NRB had offered bonds worth Rs one billion but migrant Nepalis including NRNs applied for bonds worth only Rs 8.6 million.
Likewise, the previous two issues barely got subscribed by five per cent of the total issue despite the attractive returns of over 9.5 per cent — higher than the prevalent fixed deposit rates at Nepali banks.
NRB had designated seven agents — four remitters and three financial institutions — targeting NRNs and migrant workers in Malaysia, Saudi Arabia, Qatar, Kuwait, Bahrain UAE, US, UK, Australia, Japan and Israel. The agents have cited last minute issue and lack of proper promotion of the bonds as the main reasons for the low subscription rate.
Published 13 March 2014. Kantipur.