Kathmandu. The Nepal Rastra Bank (NRB) has been continuously pulling money using deposit collection tools as excess liquidity has accumulated in the banking system.
The central bank is to withdraw Rs 50 billion from the banking system on October 10. The central bank is again pulling money from the banking system today using deposit-collection tools to manage more liquidity. According to the NRB, the bidding will take place at 3 pm today.
Banks and financial institutions can bid for a minimum of Rs 10 crore and a maximum of Rs 5 crore dividing the total amount of the total call amount.
According to the Nepal Rastra Bank, the bidding for deposit collection should be done at interest rate and multi-bidding can also be done at multi-interest rate. Only ‘A’, ‘B’ and ‘C’ class banks and financial institutions are eligible to participate in the bidding process.
The principal and interest of this 7-day deposit collection instrument will be paid on October 17, according to the central bank.
There has been a liquidity crunch in the banking system as the demand for loans has not increased in recent times. Banks and financial institutions are forced to lend money to the central bank at an interest rate of around 3 percent.
