Nepal Rastra Bank to Withdraw NPR 7,000 Crore from the Banking System on Sunday
Nepal Rastra Bank (NRB) is set to withdraw NPR 7,000 crore from the banking system on Sunday. The central bank has decided to remove liquidity from the market following an excess in liquidity. On 9th of Poush (24th December), the bank had already pulled NPR 4,000 crore from the market.
The NRB has scheduled the bidding process for 2 PM today for a period of 21 days. The minimum amount for bidding is NPR 1 crore, and the maximum is determined by dividing the total amount by NPR 50 lakh, with any remainder being considered. The principal and interest payments are scheduled for 6th of Magh (19th January), with the interest rate to be determined through the bidding process.
According to NRB, the bidding must be conducted based on interest rates. Multiple bids can also be placed at different interest rates. Only licensed banks and financial institutions from categories ‘A,’ ‘B,’ and ‘C’ can participate in the bidding process.
Participants are required to specify the amount they wish to deposit and the interest rate (up to four decimal places) in their bids. When allocating the requested amount, bids with the lowest interest rates will be given priority until the total announced amount is distributed.
If the total amount exceeds the allocated funds due to bids with identical interest rates, the distribution will be made on a pro-rata basis. The committee reserves the right to accept or reject any or all bids, whether partially or fully.
The approved bid amount will be withdrawn from the counterparty’s account maintained at NRB and deposited in a separate account designated for this purpose.
If the account of the approved counterparty lacks sufficient funds on the specified date of the instrument’s issuance, the counterparty will be blacklisted and barred from participating in future bidding processes.
