Kathmandu,

The Nepal Rastra Bank (NRB) has introduced measures to address excess liquidity in the banking system by gathering funds from financial institutions. In a recent public notice, the central bank disclosed its intention to collect Rs 10 billion through a competitive bidding process under the deposits collection scheme on December 6.

The bidding process, scheduled to commence at 2:00 pm the following day, will utilize an online bidding system software (OBSS). Participation is open exclusively to banks and financial institutions falling under A, B, and C classes. Preference will be given to those offering the lowest interest rates, according to the NRB.

Bidders are instructed to submit amounts ranging from a minimum of Rs 50 million to a maximum of Rs 100 million. The maturity period for the deposits is set at seven days, with principal and interest payments due on December 12.

The notice underscores that funds acquired through this deposit collection will be considered part of the investment portfolio of the successful bidder. Notably, this amount will not be factored into the calculation of the cash reserve ratio (CRR). However, the central bank allows for its inclusion in the statutory liquidity ratio (SLR) or Liquidity Ratio, following their instructions.

This initiative follows previous deposit collection activities by the NRB, where they successfully gathered funds on multiple occasions, including Rs 10 billion on November 22, Rs 15 billion on November 27, Rs 10 billion on November 30, and Rs 10 billion on December 3 through similar schemes.