November 3, 2020 | Investopaper
Nepal Rastra Bank is going to sell ‘Development Bond 2087 Gha’ worth Rs.20 Arba from Karthik 19, 2077. On behalf of the Government of Nepal, Nepal Rastra Bank is going to sell the bonds through bidding. The interest rate will also be determined through the bidding process.
Banks and financial institutions, non-banks-financial institutions, insurance companies, organized organizations and even Nepali citizens will be able to purchase the bonds. One can take the loan by keeping the bond as thecollateral. The interest on the bond will be paid semi-annually and tax will be charged on the earned interest. The principal amount will be refunded in 2087 BS.
Interested buyers can participate as competitors or non-competitors. 85 and 15 percent are allocated in the bidding process between competitors and non-competitors respectively. Competitors have been allocated Rs 17 Arba and non-competitors Rs 3 Arba. One can apply for a minimum of Rs 50,000. Class A, B and C banks and financial institutions licensed by the Central Bank will be able to participate as competitors.
Provision has been made for interested bidders to bid even at multiple interest rates. The bonds will be traded through Nepal Stock Exchange Limited in secondary market transactions.
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