The 56-day deposit auction will be held today, with settlement due on Asoj 1.
With excess liquidity piling up in the banking system, Nepal Rastra Bank (NRB) continues to use deposit collection instruments to withdraw money from circulation. In line with this, NRB has announced that it will absorb NPR 80 arba from the banking system through a deposit auction on Saun 7.
According to NRB, the auction will be conducted at 3 PM, and eligible banks and financial institutions can place bids starting from NPR 10 crore up to NPR 5 arba. Proposals must allow for partial allotment (non-divisible amounts are not allowed).
The bidding will be interest rate-based, and multiple bids at different rates will be allowed. Only institutions classified under categories ‘A’, ‘B’, and ‘C’ (commercial banks, development banks, and finance companies) are eligible to participate.
The deposit collection will be for a 56-day tenure, and the principal and interest will be settled on Asoj 1.
The current liquidity surplus is largely due to stagnant credit demand. As a result, many banks and financial institutions are compelled to park funds with the central bank at interest rates as low as 3%.
This article was originally published on https://bajarkochirfar.com. Translated with the help of AI and reviewed by our editorial team.
