21st May 2025, Kathmandu
Nepal’s capital market is seeing another boost. The Securities Board of Nepal (SEBON) has approved debenture issuance worth NPR 4 billion from two well-known banks. These banks are Nepal SBI Bank Limited and Shine Resunga Development Bank Limited.
SEBON Approves NPR 4B Debenture
Both financial institutions will raise long-term capital through fixed-income securities. Investors can expect reliable returns and fixed interest from these debentures.
Nepal SBI Bank to Issue NPR 3 Billion in Debentures
Nepal SBI Bank will issue 3 million debenture units, each priced at NPR 1,000. The total value of the issue will be NPR 3 billion.
Out of the 3 million units:
1.8 million will go to private investors.
1.2 million will be available to the public.
This debenture comes with a 10-year maturity period. It offers investors a 7% fixed annual return. The instrument suits investors looking for low-risk and steady income.
Nabil Investment Banking Limited will handle the issue as the sales manager. The bank aims to use the funds to strengthen its lending capacity and improve its liquidity position.
Shine Resunga Bank to Raise NPR 1 Billion
Shine Resunga Development Bank will float 1 million units of its debenture, each worth NPR 1,000. The total amount raised will be NPR 1 billion.
Of these units:
600,000 units will go to institutional and private buyers.
400,000 units will be open for public purchase.
This bond also has a 10-year maturity. But it comes with a slightly higher annual return of 8%. This return could appeal to investors seeking better yields than fixed deposits.
NIMB Ace Capital Limited is managing this issue. The bank expects strong demand from retail and institutional investors.
Why Debentures? Why Now?
Both banks are focusing on long-term capital. Debentures help reduce dependence on customer deposits. These instruments also provide stable sources of funds.
Banks use these funds for infrastructure projects, large-scale lending, and liquidity management. As Nepal’s economy grows, so does the need for diversified financial tools. Fixed-income securities like these debentures are gaining traction.
Additionally, both banks see this as a way to offer safe investment opportunities to the public. In times of market uncertainty, fixed-interest bonds remain attractive.
Investors Get Long-Term Security
For retail investors, debentures provide clear benefits:
Fixed interest income.
Low risk, especially when backed by trusted banks.
Long-term capital appreciation potential.
Nepal SBI Bank’s 7% return is lower than Shine Resunga’s 8%, but both options provide more security than equities. Moreover, the maturity period ensures consistent income for a decade.
Institutional buyers, including mutual funds, pension funds, and insurance companies, often prefer such bonds for portfolio stability.
SEBON Pushes Market-Based Financing
The Securities Board of Nepal is encouraging banks to issue more bonds. This helps build Nepal’s capital market. Instead of relying solely on deposits or short-term loans, banks can now raise funds from the market.
SEBON ensures all offerings meet strict guidelines. This includes full transparency, investor education, and legal compliance. With more banks entering the debenture market, SEBON believes the secondary bond market will grow.
Such instruments not only support banks but also provide retail investors access to new products. It’s a win-win for the financial ecosystem.
Future Outlook
Nepal’s banking sector is gradually adopting capital-market-driven funding. SEBON’s support for these initiatives is helping modernize financial services. With more banks opting for debenture issuance, investors now have diverse investment choices.
Looking forward, experts expect more institutions to follow this trend. The move will deepen the bond market and increase investor participation.
Conclusion
Nepal SBI Bank and Shine Resunga Development Bank have received the green signal to issue debentures worth NPR 4 billion. These offerings promise safe, long-term returns to investors and strengthen the banks’ financial base.
As the financial sector evolves, such developments signal a stronger, more mature capital market in Nepal.
For more: SEBON Approves NPR 4B Debenture