To manage excess liquidity in the banking system, Nepal Rastra Bank (NRB) has been regularly using deposit collection instruments. Continuing this effort, the central bank has announced it will collect an additional Rs. 90 arba from the banking sector today, Ashar 4.
According to NRB, a bidding process will be conducted at 3 PM for this purpose. Banks and financial institutions can participate in the auction with a minimum bid of Rs. 10 crore, and bids must be placed in multiples of Rs. 5 crore. The selection will be based on interest rate bids.
Only ‘A’, ‘B’, and ‘C’ class banks and financial institutions are eligible to participate in the auction. The instrument will have a maturity period of 35 days, and the principal along with interest will be repaid on Shrawan 7, as per the central bank.
Due to weak credit demand in the market, liquidity levels have remained high in the banking system. This has led banks to deposit their excess funds with NRB at low interest rates — currently around 3 percent.
This article was originally published on bajarkochirfar.com. Translated with the help of AI and reviewed by our editorial team.
