Thukten Zangpo

The government has offered bonds worth Nu 3 billion (B) for public subscription to be allocated on a yield-based auction through the Royal Monetary Authority (RMA).

The bond with a 10-year maturity period will support the government’s spending and support the economy in its recovery from the pandemic while diversifying financial sources.

The submission of subscription applications opened on January 21 and will close at 12pm on January 31.

The RMA issued a notification on January 20 that stated any Bhutanese persons, including Bhutanese citizens, firms, companies, corporate bodies, financial institutions, trust funds, and non-governmental organisations incorporated or registered under the existing laws can subscribe to the bond.

It stated that an applicant must submit the bid by using the Royal Securities Exchange of Bhutan’s web-based application.




This is the third time the government has offered the bonds to the public.

The first one was issued in September 2020 with bonds worth Nu 3B for a three-year period and the government issued bonds worth Nu 700 million for a 10-year tenure for the second time in January 2021.

The RMA notification claimed that it is a secure investment option for those who are looking for a regular return, as the Ministry of Finance will pay coupons (interest) on a semi-annual basis.

“The ministry will pay the first coupon on August 4 of this year and the second coupon on February 4, 2023, into the bank account that a bondholder has registered for receiving the payment,” it stated.

However, the annual coupon rate of the bond is to be determined in the auction.

The minimum value of the investment has been fixed at Nu 1,000 (face value) with a minimum bid amount of Nu 10,000 ,while the maximum limit has not been specified.

The interest earned from the bonds is non-taxable as personal income tax. However, the interest income from the bond is taxable income (5 percent as tax deducted at source or TDS) for business income tax and corporate income tax-paying entities.




The maturity date is on February 4, 2032, on which the principal amount and final interest will be paid.

According to the Ministry of Finance, the government has been raising much of its financial requirements through external concessional borrowings.

However, the government has started to resort to domestic and international markets to fund development projects.

As per Section 126 of Public Finance Act 2007, the Ministry of Finance can borrow money to finance fiscal budget deficits, to refinance maturing debt or a loan paid before the redemption date, to maintain credit balances in the bank accounts, and on-lending to state enterprise and other legal entities, on-lending to state enterprises and other legal entities, or any other purposes upon approval of the Cabinet.