Banking News – Nepal’s Ministry of Finance has released the draft amendment bill to the Public Debt Management Act, 2022 (2079 BS) and invited stakeholders and the general public to submit their suggestions before the legislation is finalized.

Through a public notice, the ministry requested interested parties to provide feedback within the stipulated deadline, stating that relevant recommendations will be incorporated before the bill is presented in its final form.

The proposed amendment aims to clarify the role of the Public Debt Management Office (PDMO) and establish a clear legal framework for the government’s equity and debt investments.

The draft also proposes allowing the Government of Nepal to issue government securities in both domestic and international markets, including the issuance of debt instruments denominated in foreign currencies.

Additionally, the proposal includes provisions to:

• Maintain digital records of government securities.
• Issue thematic bonds for targeted financing purposes.
• Introduce hedging mechanisms to reduce foreign exchange and interest rate risks.

The amendment further defines the sectors and entities in which the government may invest through equity or loans.

Under the proposal, government investment would be permitted in:

• Wholly or majority government-owned public institutions.
• National priority projects developed under Public-Private Partnership (PPP) arrangements.
• Intergovernmental international organizations of which Nepal is a member.

However, the draft prohibits government investment in:

• Direct lending to individuals.
• Production and sale of alcohol and tobacco products.
• Casinos and gambling businesses.
• Foreign employment agencies.

The proposed amendment also seeks to strengthen government debt recovery procedures, introduce penalties for collusion or submission of false information during government securities auctions, and digitize several bond issuance and management processes to improve transparency and efficiency.