INTERNAL BORROWING IN NEPAL

Nepal has raised internal debt for the fist time amounting to Rs.13.7 million in 1963/64. Nepal government raised internal debt by issuing treasury Bills, Development Board, National Saving Certificate, and Special Bonds. Treasury bill is a short term debt instrument whereas Development Bond; National Saving Certificate are the long term debt instruments. The Treasury Bill has maturity of 3 months whereas Development Bond, national Saving Certificate has the maturity of 5-7 years.
In 1979. HMG had raised the internal debt amounting to Rs.415.0 million in this year treasury Bills were nil whereas the Development Bonds amounted for 66.9% and special Bonds amounted for 33.1% of the total internal loan. In 1995, HNG had raised the internal debt of Rs.29,471.0 million. Of the total amount, the share if Treasury Bills was 21.7% whereas the share of National Saving Certificate and Development Bonds was 20.6% and 8.4% respectively.
As the ownership pattern of Treasury Bills, in 1995 of the total amount of Rs. 6392.5 million the share id Nepal Rastra Bank was 22.1%. As to the ownership pattern of HMG bonds call in 1995 of the total amount of Rs. 24471.0 million, the share of Nepal Rastra Bank was 53.4% commercial banks 16.7% and Provident Fund Corporation 12.5%.