As liquidity in the banking system remains high, Nepal Rastra Bank (NRB) is using deposit collection tools to pull money out.
Today, on 28th Shrawan, NRB plans to withdraw Rs 25 billion from the banking system. The move aims to manage excess liquidity. The central bank will hold a bidding session at 3 pm today.
Banks and financial institutions willing to deposit can bid in multiples of Rs 10 crore, up to a maximum of Rs 5 crore, with the remaining amount adjusted to match the total call amount.
Bidding can be done at a single interest rate or multiple rates. Only banks and financial institutions classified as ‘A’, ‘B’, or ‘C’ can participate.
This is a 25-day deposit collection instrument. Interest and principal will be paid on 22nd Bhadra, NRB said.
Recently, loan demand has not increased, leaving banks with surplus liquidity. Banks are now depositing funds with the central bank at around 3% interest.
