KATHMANDU: The central bank, Nepal Rastra Bank (NRB), is issuing a one-year bond named ‘Nepal Rastra Bank Bond 2027 (B)’ worth Rs 45 billion today through a bidding process.

According to a notice released by the central bank today, the bidding for the bond will take place through the online bidding system until 3:00 PM this afternoon.

According to NRB, the interest rate of the bond will be determined through the bidding process itself, and the interest will be paid semi-annually. The principal amount of the bond will be repaid on mid-2027.

Bidders can place bids for a minimum of Rs 50 million and in multiples of Rs 50 million thereafter, up to the total called amount. This bond can also be used as collateral at NRB as well as other banks and financial institutions.

As per the notice, only ‘A’, ‘B’, and ‘C’ class banks and financial institutions (counterparties) licensed by Nepal Rastra Bank are eligible to participate in the bidding process.

Provisions have been made to allow a single institution to submit bids at different interest rates. NRB stated that the approved interest rate will be determined progressively, starting from the lowest interest rate offered.

The central bank specified that the approved bid amount will be deducted from the respective institution’s account on the very day of issuance.

If there is an insufficient balance in the account, the approved bid will be canceled, and the institution will be barred from participating in open market operations and interest rate corridor biddings for six months.

Investment made in this bond will not be counted toward the Cash Reserve Ratio (CRR). However, it can be counted toward the Statutory Liquidity Ratio (SLR) and the net liquid assets ratio.

NRB also stated that the principal will not be refunded before the bond matures, and other procedures will follow prevailing laws and regulations.