It will hold auction for the bond once in every two months and interest rates for the bond would be determined on a market basis, sources at the central bank said.

The bond would help commercial banks manage excess liquidity, and general investors will have an alternative to invest their savings, said a high official of the BB.

Primarily, the banks and financial institutions will be the main clients of the bond, but anyone can buy the bonds through banks and financial institutions.

The BB has also taken an initiative to introduce a secondary bond market in the country. Some banks and financial institutions would be picked to participate in the secondary market. General investors will also be able to directly buy and sell bonds at the secondary market.

The government is also going to fix interest rates for savings bonds on a market basis. The new system is likely to be introduced in December. The interest rate will be fixed in every six months after reviewing the interest rate of treasury bonds.