Nepal Rastra Bank to Collect Rs 40 Billion in Deposits Today

Kathmandu. Nepal Rastra Bank (NRB) is going to collect Rs 40 billion in deposits today, Wednesday. With excess liquidity remaining, the central bank is again drawing liquidity through the deposit collection instrument auction today, Wednesday.
Total deposits have now exceeded Rs 78 trillion.

The central bank has been drawing liquidity through the deposit collection instrument and standing deposit facility to manage excess liquidity and interest rates in the financial system. Only 'A', 'B', and 'C' class banks and financial institutions licensed by the central bank can participate in the auction. 

When allocating the amount for long-term deposit collection, it will be allocated sequentially up to the called amount, prioritizing the amounts bid at the lowest rates by the counterparties according to the interest rates they bid.

As deposits have surged, bidding will be done through the online purchase system today, and the interest rate will be determined through bidding. The principal and interest of the deposit collection instrument to be auctioned today will be paid on Asar 3, 2083, the central bank has informed. The minimum amount that can be bid is Rs 100 million, and the maximum will be up to the total called amount, divisible by Rs 50 million. 

Specifically, according to the central bank's open market operations procedure, if there is a long-term excess liquidity situation in the financial market, the operational committee can use a long-term deposit collection instrument with a maturity of up to 6 months under structural open market operations on any day as needed to manage it and stabilize market interest rates.

Relying on this provision, the central bank has been using the deposit collection instrument repeatedly.