REPUBLICA

Nepal Rastra Bank (NRB) is preparing to issue Foreign Employment Bond to mobilize remittance earning and invest it in the productive sector.

Deputy Governor Gopal Prasad Kafle told Republica that the central bank was planning to issue bonds worth Rs 3 billion targeting people in foreign employment and Nepalis living abroad.

The bond will yield 10 percent interest and the central bank will invest the amount thus mobilized in the productive sector.

Speaking at a session that focused on investment in Nepal in the sixth Global Conference of Non-Resident Nepalis, Deputy Governor Kafle also appealed to the NRNs to support in bringing remittance to the country through formal channels.

Nepal receives remittance to the tune of Rs 450 billion a year. Experts estimate an equal amount of money enters the country every year through the informal channels. According to a conservative estimate, 80 percent of the remittance income is spent on consumer goods.

NRB expects the foreign employment bond will also encourage people to send money home through formal channels.

Kafle also said remittance flow from South Korea, Australia and the United Kingdoms is very negligible. He solicited the support of NRNA to encourage Nepalis to send money home through formal banking channels.

Finance Minister Shankar Prasad Koirala, who chaired the session, hailed the contribution of remittance to the national economy. “Country´s total remittance income is estimated to be worth more than the annual budget of the country. Proper utilization of the amount can play a vital role in the overall development of the country,” he added.

NRNs have established NRN Investment Limited for collective investment. They have already collected Rs 1 billion and targeted to collect Rs 5 billion. The company has started to develop Dordi Khola (27 MW) hydropower project in the Lamjung district.

Published on: 22 October 2013 | Republica