Laxmi Capital News
Foreign employment saving bond fails to attract migrant workers

Only 5.65 percent of the foreign employmentsaving bond has been subscribed by Nepalis working abroad or those who haverecently returned home from foreign employment, indicating that Nepal RastraBank's efforts to mobilize savings from migrant workers have gone invain. 

According to Nepal Rastra Bank (NRB), foreign employment saving bonds worthonly Rs 28.2 million, out of Rs 500 million worth of bonds floated last month,have been sold. 
Subscription from overseas Nepali workers for this year is, however, slightlyhigher than the bonds sold in FY2016/17. In the last fiscal year, NRB sold Rs52.1 million of foreign employment bonds out of Rs 1 billion worth securitiesreserved solely for migrant workers.

Though the foreign employment bonds are beingissued every year, the instrument is getting lukewarm responses from Nepalisworking abroad. The highest subscription rate for the bond was in FY2014/15when the central bank sold 33.49 percent out of the total of Rs 250 millionworth of securities.

The central bank has been issuing foreignemployment bonds since FY2009/10 in a bid to bring foreign currency savings ofNepalis working abroad through a formal channel and encourage them forinvestment in Nepal so that their capital can be utilized for 'nationbuilding'. 

Though the central bank has offered 10 percent interest rate on foreign employmentsaving bonds, it could not attract migrant workers.  
The foreign employment saving bonds is one of the instruments that the centralbank issues on behalf of the government to raise domestic debt for deficitfinancing of the budget. 

The government plans to raise Rs 145 billion indomestic debt for deficit financing of the budget worth Rs 1,278 billion. Inline with the government's plan, the NRB has floated Rs 500 million of foreignemployment saving bonds. Similar instrument will be issued twice in the currentfiscal year to collect Rs 500 million of debt from migrant workers. 

According to the NRB, Nepalis or NRNs, who areabroad or have returned four months ago from the date of subscription notice,can apply for the bonds from their own name or from the name of their familymembers. The NRB has appointed sales agents for the foreign employment bonds invarious countries like Qatar, Kuwait, the UAE, Japan, Saudi Arabia, Korea,Malaysia, Iraq, India, the USA and Israel. 

NRB officials attribute lack of awareness amongmigrant workers and their families to under-subscription of the bonds.

Source: My Republica, 16th January2018

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