Kathmandu – Nepal Rastra Bank (NRB) has announced plans to collect Rs. 20 billion from the banking system through a one-month deposit collection instrument to manage excess liquidity in the market.
According to the central bank, banks and financial institutions willing to participate in the bidding must submit their bids through the Online Bidding System (OBSS) by 3 pm today. The interest rate will be determined through the bidding process, with the principal and interest payable on Kartik 13.
Banks and financial institutions must specify the amount they wish to deposit and the interest rate they are seeking. Bids offering the lowest interest rate will receive priority, followed by higher-rate bids until the announced amount is fully allocated. If demand exceeds the available amount at the same interest rate, allocation will be made on a pro-rata basis.
Only licensed Class A, B and C banks and financial institutions are eligible to participate. The collected deposits can be counted toward the required Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) but cannot be included in the bidderâs investment portfolio.
The NRB has stated that the deposit cannot be withdrawn or repaid before the maturity date. The central bank regularly uses deposit collection instruments to absorb excess liquidity from the banking system.
