KATHMANDU, May 19: Nepal Rastra Bank (NRB) in a bid to mobilize the remittance earned by the migrant workers is issuing ‘Foreign Employment Saving Bond-2084’ from June 1 even as the central bank’s track record in the segment was not so encouraging.
Issuing a public notice, NRB has called on foreign employees to invest in a five-year maturity bond. It has offered an attractive interest rate of 12.50 percent per annum, which is more than the average interest rate being offered by domestic banks to their depositors.
According to NRB, interested individuals can apply online to purchase the bond by June 20. The Nepalese workers who have been working abroad, non- resident Nepali or those who returned from the foreign employment can apply for the NRB bond.
Revised interest rate corridor system introduced
Currently, Nepal has been reeling under the pressure of the depleting foreign currency reserves. The NRB, on behalf of the government, issues the foreign employment bond as a means to collect internal borrowing and to facilitate the Nepali migrant workers to send more foreign currencies to their homeland.
NRB has started issuing foreign employment bonds since the past one decade. Apart from offering higher interest rates, the government has completely waived the income tax on the earnings out of the bond. However, the success rate of selling of the bond is pretty low against the expectation of the government.
According to the NRB record, it issued foreign employment bonds worth Rs 13.58 billion during the period. But the bonds worth only Rs 679.20 million, which made around five percent of the amount, were sold out.
Last year too, the success rate in the segment was only 11 percent of the targeted amount. Citing the low selling rate, NRB in the current fiscal year has planned to sell the foreign employment bond worth only Rs 500 million, half of the amount of 2020/21.
