Citizen Saving Bonds Stable at Rs. 13.4B – Why Retail Investors Aren’t Increasing Participation

Nepal’s Citizen Saving Bonds program, designed to attract individual savers into government securities, has failed to gain fresh momentum despite the government’s growing dependence on domestic borrowing. As per the Nepal Rastra Bank’s latest data, the outstanding value of Citizen Saving Bonds (CSBs) remained nearly unchanged at Rs. 13.4 billion by mid-August 2025/26 — the same level as in the previous month — signaling stagnant retail participation in the public debt market.

The data shows that while Development Bonds surged by Rs. 40 billion and total domestic debt climbed to Rs. 1.27 trillion, Citizen Saving Bonds recorded no growth. This highlights a growing gap between institutional investors, such as commercial banks and financial institutions, and individual Nepali savers, who are showing limited interest in government-backed instruments despite relatively stable returns and low default risk.

Experts attribute this stagnation to lack of awareness, limited access, and unattractive yields compared to alternative investments like fixed deposits, cooperative returns, and emerging stock market opportunities. Additionally, the government’s low issuance volume of retail-targeted bonds has reduced visibility and participation from ordinary citizens.

Economists argue that a stronger retail bond program could help broaden domestic financing sources, reduce dependency on institutional borrowing, and encourage a savings-to-investment culture among households. For now, however, Nepal’s debt profile remains dominated by banks and large investors, with citizen participation still negligible.