Nepal Rastra Bank to Mop Up Rs. 60 Billion to Manage Excess Liquidity

Nepal Rastra Bank (NRB) has announced plans to issue a Rs. 60 billion deposit collection instrument to absorb excess liquidity from the country's banking system. The 31-day deposit facility, introduced by the central bank's Monetary Management Department, is open to Class 'A', 'B', and 'C' banks and financial institutions, which can submit bids through NRB's online bidding system until 3:00 PM today. Institutions may bid in multiples of Rs. 100 million, up to the total amount offered, with allocations prioritized for bidders quoting the lowest interest rates. In the event of identical bids exceeding the available amount, the funds will be allocated on a pro-rata basis. The instrument will mature on Bhadra 22, when NRB will repay both the principal and accrued interest to participating institutions. Under the terms of the facility, the deposited amount cannot be counted as part of banks' investment portfolios, although it will qualify for the calculation of the Statutory Liquidity Ratio (SLR) and Liquidity Ratio (LR) as required by NRB regulations. The deposit cannot be withdrawn before its maturity date.