The Himalayan Bank Limited last week began selling bonds worth Rs 360 million, of which Rs 100 million will be sold to the general public. The interest is payable every six months and the HBL-2066 bonds can be used as collateral in some banks and finance companies. The HBL is issuing the debt instrument to raise its supplementary capital in order to meet the central bank's new capital adequacy requirements. That rule requires that all banks have Rs 1 billion in paid-up capital in seven years. The HBL's paid-up capital now stands at Rs 390 million. The bank says it will sell bonds worth Rs 260 billion to larger institutional investors. Himalaya Sumshere Rana, chairman of the Himalayan Bank, told the press that the remainder of the capital adequacy requirement will be met through rights' issue of stock in coming years. Rana says that the bank is not increasing equity to ensure that the profits, in the form of dividends, do not have to be split up to a larger number of shareholders. The Nepal Merchant Bank and Finance Limited is managing the bond issue.