Nepal Rastra Bank to Absorb NPR 20 Billion in Deposits

Kathmandu: Due to excess liquidity accumulating in the banking system, Nepal Rastra Bank (NRB) is set to collect NPR 20 billion in deposits today. The central bank will mop up NPR 20 billion from the banking system through its deposit collection instrument. NRB stated that the deposit collection will take place via interest rate bidding.

Only 'A', 'B', and 'C' class banks and financial institutions are eligible to participate in the deposit collection auction. Interested banks and financial institutions must submit their bids through NRB's online bidding system by 3:00 PM today (Thursday).

Banks and financial institutions wishing to deposit funds can bid for a minimum of NPR 100 million (10 crore) up to the maximum called amount of NPR 20 billion. The bid amount must be evenly divisible by NPR 100 million. According to NRB, the maturity period for this deposit collection instrument will be 32 days.

The collected principal and interest will be paid back on Kartik 9. NRB has been using the deposit collection instrument to manage liquidity as the amount of investable funds in the banking system continues to rise.