NRB calls auction for Treasury Bills of worth Rs.13.25bn

Kathmandu: Nepal Rastra Bank(NRB) is announced auction of Treasury Bills of worth Rs.13.25 billion.

NRB, the central bank is going to issue a total of Rs. 13.25 billion treasury bill for a period of 91 to 364 days. According to the auction notice issued by the  Bank, treasury bills of Rs. 8 billion for a period of 91 days, Rs. 2.25 billion for a period of 182 days and Rs. 3 billion for a period of 364 days will be auctioned.

The treasury bills will be auctioned online on Monday. An individual, bank or institution can participate in the auction. Earlier, the NRB had issued a treasury bill of Rs 19.10 billion on October 4, 2021 to raise short-term debt for Government of Nepal.

What is a treasury bill?

Treasury bill is a kind of promissory note issued by the Central Bank on behalf of government to raise short term internal debt. With the treasury bill, the central bank guarantees to pay the face value on maturity.

The treasury bills are issued on discounted price. For example, a treasury bill with face value of Rs. 3 billion is issued at the discounted price of Rs. 2.99 billion. The difference amount i.e. Rs. 10 million is the interest income of the individual or the institution who bid the treasury bill. Participants in the bidding for the treasury bill must pledge a minimum of Rs. 50,000.

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