Nepal Rastra Bank to Absorb 40 Billion Rupees in Liquidity via Deposit Collection

Kathmandu. Nepal Rastra Bank is set to collect 40 billion rupees in deposits for a period of 56 days today. The central bank is initiating this deposit collection to manage excess liquidity within banks and financial institutions.

The central bank has been absorbing liquidity through deposit collection tools and standing deposit facilities to manage excess liquidity and interest rates in the financial system. Only 'A', 'B', and 'C' class banks and financial institutions licensed by the Rastra Bank are eligible to participate in the bidding process.

When allocating the long-term deposit collection amount, the central bank will prioritize bids with the lowest interest rates until the total requested amount is reached. The bidding will be conducted today via an online system, with interest rates determined through the auction. The principal and interest for this deposit collection tool will be paid on 2083 Baishakh 27.

The minimum bid amount is 100 million rupees, and bids must be in multiples of 50 million rupees up to the total amount requested.

According to the central bank's open market operations procedures, if long-term excess liquidity is observed in the financial market, the operations committee can utilize long-term deposit collection tools with a maturity of up to 6 months to manage market interest rates. The central bank has been frequently utilizing this provision to maintain financial stability.