Nepal Rastra Bank (NRB) is now withdrawing Rs. 50 billion from the banking system. This decision came after too much liquidity (extra cash) flooded into banks.
Today, on Asar 11, NRB announced it will pull out this large amount to maintain balance in the financial system.
Banks and financial institutions can take part in the auction process, but only ‘A’, ‘B’, and ‘C’ class institutions are allowed to join. The minimum bid amount is Rs. 10 crore and they must place bids in multiples of Rs. 5 crore.
The auction will be based on interest rates. NRB has allowed multiple bids with different interest rates too.
The total amount collected through this method will be returned along with interest on Bhadra 11.
This move shows how NRB is carefully managing liquidity to keep Nepal’s financial market stable.
