According to the notice, only banks and financial institutions (counterparties) of category 'A', 'B' and 'C' licensed by Nepal Rastra Bank will be allowed to participate in the bidding.
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Nepal Rastra Bank is going to issue one-year 'Nepal Rastra Bank Bond 2084 (B)' worth Rs 45 billion through a bid today. The bidding for the bond will be held through the online bidding system till 3 pm today, the central bank said in a notification today.
According to the Rastra Bank, the interest rate of the bond will be determined through a bid and the interest will be paid semi-annually. The principal of the bond will be paid on Ashar 17, 2084. A minimum bid of Rs 50 million and thereafter up to the total call amount in multiples of Rs 50 million can be made. This bond can also be used as collateral in the Rastra Bank and other banks and financial institutions.
According to the notification, only 'A', 'B' and 'C' class banks and financial institutions (counterparties) licensed by Nepal Rastra Bank will be allowed to participate in the bidding. The same institution can bid at different interest rates. The National Bank has stated that the approved interest rate will be determined gradually starting from the lowest interest rate. The National Bank has stated that the approved bid amount will be deducted from the account of the concerned institution on the day of issuance. If there is not enough balance in the account, the approved bid will be canceled and there is a provision that the institution will not be able to participate in open market transactions and bids under the interest rate corridor for six months. The investment made in the bond will not be counted in the cash reserve requirement (CRR). It can be counted in the statutory liquidity ratio (SLR) and net liquid assets ratio. The National Bank has stated that the principal will not be repaid before the maturity of the bond and other processes will be as per the prevailing laws and regulations.
