NRB Report: Citizen and Foreign Employment Bonds Stable Amid Moderate Growth in Domestic Liabilities

According to the latest Nepal Rastra Bank (NRB) data, both Citizen Saving Bonds and Foreign Employment Bondsremained largely stable during the first two months of FY 2025/26, even as Nepal’s overall domestic debt saw moderate growth driven primarily by development bonds.

As of mid-September 2025, the outstanding amount of Citizen Saving Bonds stood at Rs 13.4 billion, unchanged from mid-July levels. Similarly, the Foreign Employment Bond portfolio showed only a marginal uptick—from Rs 330.3 million to Rs 330.4 million, marking a negligible 0.1% increase. These instruments represent the retail and diaspora-focused segment of Nepal’s domestic borrowing structure, designed to encourage broader citizen participation in public financing.

In contrast, other components of government debt grew at a faster pace. Development Bonds surged to Rs 943.76 billion, a Rs 70 billion increase year-on-year, while total domestic liabilities rose to Rs 1.27 trillion, up Rs 13.6 billion from mid-July. The report highlights that while institutional investors such as commercial and development banks remain the main financiers, small-scale bonds aimed at citizens and overseas Nepalis continue to provide a steady but limited contribution to the overall debt portfolio.

Economists interpret the stability of these citizen-oriented bonds as an indicator of consistent investor confidence but also point out the untapped potential for expanding participation through enhanced accessibility and digital platforms. Encouraging retail investment could diversify the government’s debt base and reduce reliance on banks, which currently hold over 80% of total domestic debt.

NRB officials have emphasized the importance of maintaining a balanced debt structure, combining institutional financing with public participation tools like Citizen Saving Bonds to foster long-term fiscal resilience.