Economy

NRB to issue foreign employment bonds

Published by Octron on December 27, 2010

Nepal Rastra Bank (NRB) is preparing to issue foreign employment bonds with the aim of channelling remittance into national development in a continuation of last year’s programme.

The central bank is preparing to issue a notice this week asking interested money transfer agencies to work as intermediaries for issuing bonds in foreign lands.

The government has planned to issue foreign employment bonds of Rs 5 billion this year. It had failed to attract an adequate number of subscribers last year. It sold only Rs 4 million worth of bonds out of the Rs 1 billion issued.

The bonds pay an annual interest of 9.75 percent and have a maturity period of five years. The government had announced issuing bonds worth Rs 7 billion last year.

However, NRB officials are optimistic that subscription will increase this year. “The experience gained last year is also a plus point for our planning this year,” said NRB spokesperson Gopal Kafle. “Further, we have recognised the hurdles; we can avoid them this year,” he added.

Last year, foreign employment bonds were issued in Qatar, Saudi Arabia, the UAE and Malaysia where a majority of migrant Nepali workers are based.

NRB had planned to issue bonds in South Korea too but it did not happen.

A senior NRB official said that issuing bonds in South Korea could not take place as the money transfer agencies facilitating remittance inflow from the country could not get recognition from the Korean government.

“The possibility of issuing bonds there is slim this year too,” added the official.

Source: Kantipur

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