Nepal Rastra Bank to Collect Rs 100 Billion in Deposits

Kathmandu. Nepal Rastra Bank has decided to collect deposits worth Rs 100 billion today with the objective of managing excess liquidity in the market.

Issuing a notice today, the Monetary Management Department of Rastra Bank has called for bids to collect Rs 100 billion in deposits through a deposit collection instrument for 83 days. The bidding will take place through the online bidding system software until 3:00 PM today, and the deposit collection instrument will also be issued today.

According to the notice, the interest rate of the deposit collection instrument will be determined through the bidding process. The principal and interest will be paid on 2083 Ashoj 27.

Under the bidding, it has been arranged to allow applications from a minimum of Rs 10 crore up to the total amount called. A single participant can submit more than one bid at different interest rates.

Only 'A', 'B', and 'C' class banks and financial institutions licensed by Nepal Rastra Bank will be able to participate in the bidding. The application must mention the amount of deposit intended and the interest rate up to four decimal places.

According to the central bank, the bids will be accepted up to the called amount, prioritizing the lowest interest rate. If the demand exceeds the amount at the same interest rate, it will be allocated on a pro-rata basis. The notice states that the open market operations committee will have the right to accept or reject all or part of the bids.

The bank has stated that the deposit collection instrument will be counted as an investment portfolio. Although the collected amount cannot be counted in the mandatory cash reserve ratio (CRR), it can be counted in the statutory liquidity ratio (SLR) and liquidity ratio. Furthermore, it has been clarified that there will be no pre-maturity payment facility before the maturity period is completed.