The Securities Board of Nepal (SEBON) has not approved any debenture issuances for the past year.
The last debenture approval was granted on December 18, 2023, when Nepal Investment Mega Bank received permission to issue 4.04 million units of debentures worth Rs 4.04 billion. Since then, no other company has been authorized to issue debentures.
Currently, 10 companies have applied to SEBON for the issuance of a combined total of 28.8 million units of debentures. Among them, Prime Bank has applied for 3 million units, N.I.C. Asia Bank for 5 million units, Shine Resunga Development Bank for 1 million units, Nepal Infrastructure Bank for 5 million units, Rastriya Banijya Bank for 2.5 million units, Nabil Bank for 3 million units, Citizens Bank for 3 million units, Nepal SBI Bank for 3 million units, ICFC Finance Limited for 300,000 units, and Everest Bank for 3 million units.
The debenture issuance process stalled when SEBON’s chairman position remained vacant from January 5, 2024.The deadlock continues, despite the appointment of Santosh Narayan Shrestha as SEBON’s chairman on November 25, 2024.
Upon taking office, Shrestha emphasized that public issuance approvals would proceed transparently and without controversy. SEBON has since reiterated its commitment to processing approvals for companies that have submitted complete documentation.
SEBON spokesperson Niranjaya Ghimire stated that the relevant department is actively working on public issuance approvals and has requested updated financial statements and additional documents from long-pending applicants. Ghimire clarified that the delay in debenture approvals was procedural and not an intentional hold-up.
Investor interest in debentures has surged as banks and financial institutions have reduced deposit interest rates. Fixed deposit rates currently range between 3% and 6.6%, prompting investors to seek higher returns through debentures, which offer fixed interest rates over specific periods.
With debenture issuance absent in the primary market, secondary market trading of debentures has increased. Among the applicants, Nepal Infrastructure Bank plans to issue debentures at a 6% interest rate, while other institutions propose rates exceeding 7%. ICFC Finance Limited aims to issue debentures at the highest rate of 9% for a seven-year term.
|
Company Name |
Debenture Units to be Issued |
Application Date |
|
Rastriya Banijya Bank (7 years, 8% interest) |
2,500,000 |
30 August , 2022 |
|
Citizens Bank (10 years, 6.5% interest) |
3,000,000 |
26 January , 2024 |
|
Nepal SBI Bank (10 years, 7% interest) |
3,000,000 |
15 May , 2024 |
|
Nabil Bank (7 years, 8% interest) |
3,000,000 |
28 June , 2024 |
|
ICRA Finance (7 years, 8% interest) |
300,000 |
2 July , 2024 |
|
Everest Bank (10 years, 7.5% interest) |
3,000,000 |
4 July , 2024 |
|
Prime Bank (7 years, 8% interest) |
3,000,000 |
17 July , 2024 |
|
NIC Asia Bank (10 years, 7% interest) |
5,000,000 |
23 September , 2024 |
|
Shine Resunga Development Bank (10 years, 8% interest) |
1,000,000 |
30 September , 2024 |
|
Nepal Infrastructure Bank (10 years, 6% interest) |
5,000,000 |
30 September , 2024 |
|
Total |
28,800,000 |
Source: SEBON
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