Central bank to issue Rs 250 million worth Foreign Employment Bond
The central bank is issuing Foreign Employment Bond worth Rs 250 million from tomorrow.
The five-year Foreign Employment Bond 'A' is targeted to sell migrant Nepali workers and mobilise the remittance in the productive sector, according to the central bank that has has offered nine per cent annual interest payable half yearly. "The issue will be open till January 6, 2014."
The migrant workers, who have returned less than four months ago, and still working aboard can buy a minimum of Rs 5,000 or multiple of Rs 5,000 but not increasing the limit, it said, adding that they can buy the bond from seven agents – IME, Prabhu Money Transfer, Prabhu Development Bank, City Express Money Transfer, Century Commercial Bank, Sewa Express and Sunrise bank – appointed by the central bank.
The remittance has been spent on unproductive sector and has not been used for capital formation, according to the Central Bureau of Statistics (CBS). "Some 78.9 per cent of remittance is used for daily consumption, 7.1 per cent is spent to repay loan, 4.5 per cent to buy household property, 3.5 per cent for education of their kids, 2.6 per cent for other activities and only 2.4 per cent of the remittance is used in productive sector for capital formation," reported Nepal Living Standard Survey 2010-11 of CBS.
The country has received Rs 178.89 billion remittance in the four months of the current fiscal year, according to the central bank. In the last seven years, the remittance inflow has increased by more than four times from Rs 101.44 billion in the fiscal year 2006-07 to Rs 434.58 billion in the last fiscal year 2012-13.
Meanwhile, the central bank has also been planning to issue Rs 6 billion worth seven-year development bond and Rs 1 billion worth five-year national development bond as internal borrowings to finance budget deficit.