Nepal Rastra Bank (NRB) has announced it will take back NPR 30 arba from the banking system on Asar 15 to deal with excess liquidity. This move is aimed at managing the large amount of unused cash currently sitting in banks and financial institutions.
To do this, NRB will collect the amount through a deposit collection auction. Banks and financial institutions in categories ‘A’, ‘B’, and ‘C’ can take part by placing bids. The minimum bid amount is NPR 10 crore, and bids must increase in steps of NPR 5 crore.
The auction will use a multi-rate bidding process, which means bidders can offer different interest rates for different parts of their bid. NRB will return the deposited money along with the agreed interest on Bhadra 15.
Banks currently have more money than they are lending because loan demand has slowed down. As a result, they have been depositing funds with the central bank at around 3% interest.
This news was originally published by bajarkochirfar.com and has been translated and reviewed by the editorial team.
