The Nepal Rastra Bank (NRB) is set to withdraw NPR 60 billion from banks and financial institutions today, Sunday, due to excess liquidity. To manage the surplus liquidity, NRB plans to use deposit collection instruments for a 21-day period.
Despite a prolonged period of high liquidity in the market, NRB has been withdrawing funds at least twice a week. In line with this practice, NPR 60 billion is being withdrawn today.
NRB has invited banks and financial institutions to participate in an online bidding process until 2 PM today. According to NRB’s notice, bidding can be made in multiples of a minimum of NPR 10 million and a maximum of NPR 500 million. The bidding must be based on interest rates, and multiple bids with varying interest rates are also allowed.
Only ‘A,’ ‘B,’ and ‘C’ class banks and financial institutions are eligible to participate in the deposit collection instrument bidding. NRB’s notice further mentions that the purchased deposit collection instruments can be used as collateral with other banks and financial institutions.