Kathmandu. KATHMANDU: Nepal Rastra Bank (NRB) has decided to withdraw money using deposit collection tools after excess liquidity accumulated in the banking system. Prior to this, the central bank had been issuing debentures for a period of one year continuously and had mopped deposits from the banking system.
The central bank of Nepal (NRB) is to withdraw Rs 20 billion from the banking system on January 18. The central bank is again pulling money from the banking system today using deposit-collection tools to manage more liquidity. According to the Nepal Rastra Bank, the bidding for this will take place at 2 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.
According to the NRB, the 84-day deposit collection instrument will be paid principal and interest on April 12.
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.
