Kathmandu. Nepal Rastra Bank (NRB) is struggling to manage the liquidity of the banking system. Since the last fiscal year, more liquidity has accumulated as deposits have increased compared to banking system loans.
Since the last financial year, the central bank has been withdrawing money from the banking system using deposit collection tools to manage more liquidity. However, as more liquidity continues to accumulate, the central bank is struggling.
The central bank is set to withdraw Rs 40 billion from the banking system again on August 15. According to the Rastra Bank, the bid will be held at 3 pm today.
Banks and financial institutions that want to make deposits can bid up to the total call amount by dividing it by a minimum of Rs 100 million and a maximum of Rs 50 million.
According to the Rastra Bank, deposit collection will have to be bid at interest rates and multiple bids can also be made at multiple interest rates. Only ‘A’, ‘B’ and ‘C’ category banks and financial institutions will be allowed to participate in the bidding of deposit collection equipment.
The 35-day deposit collection instrument will be repaid on September 15, according to the Rastra Bank.
In recent times, there has been a liquidity crisis in the banking system due to lack of demand for credit. Banks and financial institutions are being forced to give money to the central bank at an interest rate of around 3 percent.
