Debenture in Nepal: what a ऋणपत्र is, what it pays after tax, and how to buy one

A debenture (ऋणपत्र, rinpatra) is a loan you make to a company in return for a fixed rate of interest and your money back on a set date. In Nepal the company is almost always a bank or a finance company, the loan is sold in units of Rs 1,000, the face value (अंकित मूल्य), and it runs for five to ten years, sometimes fifteen. The fixed rate is the coupon: a 6% debenture pays Rs 60 a year on each unit before tax, whatever happens to the bank's profit or its share price.

That is the whole difference from a share. A shareholder owns a slice of the company, votes at its meetings and gets a dividend only when the board declares one. A debenture holder is a creditor (ऋणदाता): no vote and no share of the profit, but a promise of fixed interest and repayment that comes before shareholders if the company is wound up. "Debenture share", as people often search it, is a slip of the tongue: a debenture is not a share, even though it is sold through an issue like an IPO, sits in your demat account and trades on NEPSE like one.

Nepalis meet debentures in three places: as a public issue applied for in MeroShare, as a listed security bought and sold through a broker, and in the news when a bank announces one. This guide covers all three, with the 6% tax worked into every sum. The debenture calculator uses the same arithmetic for your own numbers.

Nepali debentures carry their terms in their names. Take 10.25% Citizens Bank Debenture 2086, on NEPSE as CIZBD86. 10.25% is the coupon, so each Rs 1,000 unit earns Rs 102.50 a year, Rs 96.35 after the 6% tax. Citizens Bank is the issuer, the bank you lend to. Debenture, or Rinpatra (ऋणपत्र), or now and then Bond, says it is a loan. 2086 is the year it matures in Bikram Sambat, roughly 2029–30 AD.

The year needs one caution. It is the issuer's label, and it can stand for a fiscal year rather than a calendar year: Nepal Bank's "8.5% NBL Debenture 2087" matures on 9 Jestha 2088 by the bank's own capital report, a date inside fiscal year 2087/88. Names with a slash, such as "Global IME Bank Debenture 2086/87", name the fiscal year outright. For the exact day, read the issuer's offer document or notice, not the name.

So 6.25% Prime Bank Debenture 2093 (PBD93) is Prime Commercial Bank's ten-year loan at 6.25%, repaid in 2093 BS, about 2036–37. 6% RBBL Debenture 2089 is Rastriya Banijya Bank's seven-year loan at 6%, sold in Kartik 2083. 8% ICFC Finance Debenture 2089 (ICFCD89) is a finance company's seven-year loan at 8%. Some names leave the coupon out: CDSC lists "Civil Bank Debenture 2088", which pays 10.25%. A few call themselves bonds, such as "9% Jyoti Bikash Bank Bond 2087", but CDSC's register classes every one of them as a debenture.

Nearly every debenture in Nepal is issued by an institution licensed by Nepal Rastra Bank: commercial banks above all, then development banks, finance companies and Nepal Infrastructure Bank, and in SEBON's queue a microfinance company. CDSC's register held 81 debentures and bank bonds on 5 November 2026, and ShareSansar counted 70 listed on NEPSE in June 2026, worth about Rs 167.71 arba. It expects 49 of them, about Rs 109 arba, to be repaid by December 2031.

Banks issue them for capital as much as for money to lend. Under NRB's rules a bank's long debenture counts as subordinated term debt, part of its supplementary (Tier II) capital: money that takes losses before depositors do. Nepal Bank's Basel III report for Ashadh 2083 counts its Rs 3.5 arba 8.5% debenture that way, and says NRB's Capital Adequacy Framework 2015 lets such debt count for less in each of its last five years, one reason banks borrow for seven to ten. Banks also put money aside each year in a debenture redemption reserve to repay it: Rs 194.44 crore at Nepal Bank.

In 2019 NRB's monetary policy for 2076/77 told every commercial bank to issue debentures worth at least 25% of its paid-up capital, a deadline later pushed back to Asar 2079. That is why so many listed debentures date from 2019 to 2023 and carry coupons of 8.5% to 12%. Since then the flow has slowed. Banks hold more deposits than they can lend, and ShareSansar expects them to replace maturing high-coupon debentures with cheaper ones. We found no sign of the 25% rule in the 2083/84 policy coverage we read.

Companies other than banks may follow. In August 2026 SEBON published a draft, the Debenture Registration and Issuance Regulation 2083, that would let any company with paid-up capital of at least Rs 1 arba issue debentures, if it has a credit rating, a clean year of loan repayments and debt of no more than 70% of its funding. Ordinary companies could issue only secured debentures, every issue would need a trustee, private placements would be open to individuals only from Rs 1 crore, and a separate over-the-counter market is proposed. On 5 November 2026 it was still a draft.

Textbooks list a dozen kinds of debenture. Nepal's listed market has, in practice, one: unsecured, subordinated, redeemable at a fixed date, with a fixed coupon, and not convertible into shares. The kinds people search for, and where each stands here:

New debentures pay far less than old ones. The 13 issues SEBON approved from fiscal year 2081/82 to 2083/84 carry coupons of 6% to 9%, and the latest, RBB's, 6%. In SEBON's pipeline on 2083/07/13 (30 October 2026) the coupons run from 5.5% to 8%: Nabil has asked to sell a ten-year debenture at 5.5%, and Citizens Bank, having cut its proposed rate from 8.5% to 7.5%, has been asked to revise it again. When fixed deposits paid 10–12% in 2022 and 2023, debenture coupons of 9% to 12% were common.

The coupon follows the market. A bank pays what it must to sell the debenture: more than its own longest FD, because the money is locked for years, is not covered by the deposit guarantee and ranks behind depositors, but no more than that. As FD rates fell through 2025 and 2026, coupons fell with them; the fixed deposit guide has every bank's FD rates for 1 Kartik 2083 (18 Oct 2026).

The split has been the same in every recent issue: 40% of the units to the public, 60% by private placement to institutions (RBB's 7% 2088 was the exception, 60% public), and 5% of the public part kept for mutual funds in the notices we read. Under "Stage" below, a BS date is the day SEBON approved the issue.

32 debentures traded on NEPSE on 4 November 2026. 31 closed above their Rs 1,000 face value, from Rs 1,025.00 to Rs 1,227.00 (Civil Bank Debenture 2088); one, NMB Urja Rinpatra 4% 2093/94, closed below it at Rs 939.30. The table lists them by the year they mature, with the coupon, how often each pays, and the closing price.

A price above Rs 1,000 is the market's answer to falling rates. A 10% debenture sold in 2022 pays Rs 100 a year on each unit; a new one pays about Rs 60. Buyers bid the old one up until the money it pays, set against what they pay for it, is in line with new issues. Near maturity the price is pulled back towards Rs 1,000, because that is all that will be repaid: ADBL's 10.35% Krishi Bank Rinpatra, which matures in 2083, closed at Rs 1,025.00.

Trading is thin. On 4 November 2026, Rs 45,78,186 of debentures changed hands in 85 trades, 0.06% of NEPSE's turnover that day of Rs 744 crore. 16 of the 32 traded 25 units or fewer all day. A seller may have to wait, or take a lower price, and a buyer may not find the units at all.

A public issue of debentures is applied for exactly like an IPO of shares: in MeroShare or at a C-ASBA bank, with the money blocked in your bank account until the allotment. You need a demat account, a MeroShare login and a bank account linked to them. The MeroShare IPO guide shows each screen, and the demat guide how to open one.

The difference is in the numbers. The minimum application is 25 units, Rs 25,000, against 10 shares in an equity IPO, and in the 2026 issues the maximum was "all units": RBB's and Prime's notices let one person apply for the whole public part. An issue is open for about a week, with a later closing date set in advance in case it is not fully applied for. RBB's 6% 2089 opened on 29 Asoj 2083 (15 October 2026) and closed on 10 Kartik (27 October 2026).

When more is applied for than is on offer, not everyone gets all they asked for. By the closing day of Prime's 6.25% issue, 11,683 applicants had asked for 21,46,896 units against 12,00,000 offered to the public; Laxmi Sunrise's 7% closed early because it was over-applied. The issue manager publishes the allotment, the blocked money that was not used is released, and the debenture is listed on NEPSE about two months after it closes: Prime's closed on 7 July 2026 and listed on 7 September; Laxmi Sunrise's was allotted on 1 Bhadra and listed on 23 September.

1. 1Watch for the issue: SEBON's approval list and pipeline, the bank's notice, or MeroShare's Current Issue list once it opens.
2. 2Read the offer summary: the coupon, the term, how often interest is paid, whether it is secured, and the credit rating.
3. 3Log in to MeroShare, open My ASBA, and find the debenture under Current Issue. Its share type says debenture.
4. 4Apply: choose your bank and account, enter the units (25 or more) and your CRN, tick the declaration, press Proceed and confirm with your 4-digit transaction PIN.
5. 5Check the Application Report for the status, and after the allotment for the units you were given; they appear in your demat account.
6. 6From then on, the interest arrives in the bank account linked to your demat, after tax, every half-year or quarter.

You put in

Rs 1,00,000

Every six months

Rs 2,820

Over 7 years, after tax

Rs 39,480

Back at maturity

Rs 1,00,000

Most Nepali debentures pay interest twice a year and a few four times. Of the 75 in nepsealpha's tracker in August 2025, 67 paid half-yearly and 8 quarterly; PBLD84, EBLD85 and CBLD88 are the quarterly ones in the table above. RBB says its 6% 2089 pays every six months of the fiscal year, after tax, and Prime its 2093 "at the end of each half-yearly period". The money goes to the bank account linked to your demat.

The issuer keeps back 6% of the interest as tax, under section 88(3) of the Income Tax Act, 2058: the same section, and the same rate, as for interest on a fixed deposit. Section 92 makes it final for an individual, so there is nothing more to pay and nothing to declare, and the interest is not added to your salary for income tax.

Gita applies for 100 units of 6% RBBL Debenture 2089, Rs 1,00,000. Every six months the bank works out Rs 1,00,000 × 6% ÷ 2 = Rs 3,000, keeps Rs 180 and pays her Rs 2,820. 14 payments over seven years come to Rs 39,480 after Rs 2,520 of tax, and in 2089 she gets her Rs 1,00,000 back. Her return is 5.64% a year after tax: the coupon × 0.94.

To fix who is paid, the issuer closes its register shortly before each payment, a book closure, and whoever holds the debenture then gets the whole payment. NEPSE does not add accrued interest to the price the way bond markets abroad do (brokers' tariffs list only commission, SEBON's fee and the DP charge), so a buyer a week before a book closure gets a full half-year's interest within weeks. Keep that in mind when you compare two prices.

A bank's debenture pays more than the same bank's longest fixed deposit. In 1 Kartik 2083 (18 Oct 2026), the five debentures below paid 1.75 to 3 points a year more than each bank's top individual FD rate.

On Rs 1,00,000 for five years, a 6% debenture paid half-yearly brings Rs 28,200 after tax. A fixed deposit at 4%, about the average top rate of the 20 commercial banks, brings Rs 18,800 paid out quarterly and Rs 20,577.46 with the interest added to the deposit. NRB projects inflation of about 5.5% for 2083/84: against that the debenture's 5.64% after tax is a real return of about +0.13% a year, and the FD's 3.76% about −1.65%.

The extra interest is the price of four things an FD gives you and a debenture does not:

• The deposit guarantee. Deposits at a licensed bank are guaranteed up to Rs 5 lakh per person per bank. A debenture is a loan to the bank, not a deposit, and is not covered.
• The queue. A subordinated debenture is repaid after depositors if the bank fails.
• A way out at a known cost. An FD can be broken for a penalty the bank publishes. A debenture cannot be handed back; it is sold on NEPSE at the day's price, if a buyer is there.
• Short terms. FDs run from three months. Debentures run 5 to 10 years, and the minimum in an issue is Rs 25,000.
• What is the same: the 6% tax, final, on both.

Listed debentures are bought and sold through a broker in TMS, like shares, and settle the same way, two working days after the trade. The price is per Rs 1,000 unit, and it is rarely Rs 1,000. What you earn depends on the price you pay, not only on the coupon, and two measures say how:

The current yield is a year's interest after tax ÷ the price. The yield to maturity (YTM) also counts the fact that you get Rs 1,000 back at the end, not what you paid: buy above Rs 1,000 and the difference is lost slowly over the years; buy below it and the difference is gained. The YTM is the rate that makes every payment after tax and the money back worth exactly what you paid.

On 4 November 2026, 6.25% Prime Bank Debenture 2093 closed at Rs 1,115. Bought there, 100 units cost Rs 1,11,500 plus Rs 111.50 commission, Rs 11.15 SEBON fee and the Rs 25 DP charge: Rs 1,11,647.65. They pay Rs 2,937.50 every half-year after tax, a current yield of 5.26% on what was paid. But Prime repays Rs 1,000 a unit in about 9 years 8 months (2093-03-19 BS, as nepsetrading lists it), not Rs 1,115. Counting that, the yield to maturity after tax is 4.62%, against 5.875% for someone who got it in the issue at Rs 1,000. It would have to rise to about Rs 1,190 before it yielded only what a 4% FD does after tax.

The rule: above Rs 1,000, the yield is below the coupon after tax; below Rs 1,000, above it. NMB's 4% Urja Rinpatra closed at Rs 939.30, a current yield after tax of 4.00%, and more than that to maturity, because the price climbs back to Rs 1,000 by the end.

The same arithmetic runs the other way, and it is the main risk of buying a long debenture. If rates rise after you buy, new debentures pay more and yours is worth less. A 6.25% ten-year debenture bought at Rs 1,000 would have to fall to about Rs 886 to yield what a new 8% one does after tax, which is what banks paid in 2021–22; if new ones pay 5.5%, as Nabil proposes, it would be worth about Rs 1,055. Hold to maturity and none of this touches you: Rs 1,000 comes back either way.

• Commission: debentures have their own, lower bands than shares: 0.1% up to Rs 5,00,000 (at least Rs 10), 0.05% to Rs 50,00,000, 0.02% above that. On Rs 1,11,500 that is Rs 111.50, against Rs 367.95 for shares of the same value.
• SEBON's fee: 0.01% of the value on corporate debentures. DP charge: Rs 25 per debenture per settlement, buying and selling.
• Selling: 100 PBD93 units sold at Rs 1,115 bring Rs 1,11,352.35 after costs. For someone who got them at Rs 1,000 in the issue, that is a gain of Rs 11,352.35.
• Tax on a gain: NEPSE takes tax on gains from listed securities at settlement, 3.75% for an individual who held over 365 days and 5% otherwise, since 22 September 2026. None of the notices we read says whether, or how, debentures are treated differently, so ask your broker before you sell; at 5%, the gain above would lose Rs 567.62.

A debenture sits between a fixed deposit and a share: it trades like a share but pays like a deposit. Set beside a share, question by question:

• A bond, in Nepal, usually means the government's. Development bonds are sold by auction by the Public Debt Management Office; the ten auctions of 2083/84 to Kartik 11 cleared at 2.39% to 4.50%, 3.04% on average, and they are listed on NEPSE.
• Savings bonds are sold to individuals: the last Nagarik Bachatpatra (citizen savings bond) paid 6.5% and the last Baideshik Rojgar Bachatpatra (foreign employment savings bond, for Nepalis working abroad) 7.5%, both for five years, sold in Kartik–Mangsir 2082. PDMO's site listed no new savings bond for 2083/84 on 5 November 2026. The foreign employment bond is explained in investing in Nepal from abroad.
• The difference that matters: a government bond is backed by the government; a debenture only by the bank that issued it. The banks' own "bonds", such as ADBL's 4% agricultural bonds and NMB's 4% energy bond, are debentures in CDSC's register.
• All of them pay interest taxed at 6% for an individual. How shares, funds, deposits and bonds fit together is in how to invest in Nepal; shares themselves in share market for beginners.

At maturity the issuer repays the face value with the last interest payment, and the debenture leaves NEPSE a few days before. Himalayan Bank's 10% Debenture 2083, 25,69,104 units, was delisted on 19 August 2026 ahead of its maturity on 8 Bhadra, and the bank said it would repay the principal and pay the interest through its branches. Interest on debentures held in demat goes to the bank account linked to the demat, so if that account has closed, update it with your DP before a payment is due.

If the bank fails, the debenture is where the risk shows. It is not a deposit, so the Deposit and Credit Guarantee Fund's Rs 5 lakh does not cover it; it is usually unsecured, so no asset is set aside for it; and it is usually subordinated, so depositors and other senior creditors are paid first. Holders then wait for what is left, ahead only of shareholders.

A rating is the quickest outside opinion. RBB's offer summary gives CARE Ratings Nepal's CARE-NP A+ (Is) for the bank, and explains it as adequate safety for paying its obligations on time, with low credit risk. A rating is an opinion on the date it was made, not a guarantee.

• The credit rating in the offer summary, and the agency's reasons.
• The bank's capital adequacy and bad loans in its latest quarterly report; reading a company's numbers explains them.
• The debenture redemption reserve in the same report: money already set aside to repay.
• Size and owner: a large bank, or one the government owns, is not the same risk as a small finance company, and the coupons usually say so.

"Is it good to invest in debentures?" has no answer that fits everyone, and this page does not give one. A debenture swaps the deposit guarantee and an easy exit for a coupon about 1.75–3 points above the same bank's longest FD, fixed for years. Whether that suits you depends on when you need the money and how you would feel seeing it priced below what you paid. We are not licensed advisers; these are the facts to weigh.

• Credit risk: the bank may not pay. It is low for a sound bank and rises for a weak one; nothing guarantees it.
• Liquidity risk: you may not be able to sell when you want, at the price you want. Most listed debentures trade a few dozen units a day, if at all.
• Interest-rate risk: if rates rise, the price falls; it matters only if you sell before maturity.
• Inflation risk: a fixed coupon buys less each year if prices rise faster than expected; the coupon never rises with them.
• Reinvestment and call risk: when a debenture matures, new ones may pay less. None of the notices we read gave the issuer a right to repay early; if a prospectus does, it says so.
• Concentration: a large sum in one bank's debenture rides on that one bank.