Kathmandu. KATHMANDU: Nepal Rastra Bank (NRB) is to withdraw Rs 40 billion from the banking market today due to excess liquidity in the banking system. The central bank is collecting the amount through the deposit collection instrument today.
Nepal Rastra Bank (NRB) has decided to collect deposits for a period of 56 days. According to the NRB, the bidding for the equipment will be held today itself and the principal and interest of the collected amount will be paid on Jestha 17, 2083.
According to the Nepal Rastra Bank, the interest rate for the deposit collection will be determined through bidding.
Interested banks and financial institutions can apply for a minimum of Rs 10 crore and maximum of Rs 5 crore. Banks will have to bid at interest rate for deposit collection and a single institution can bid at multiple interest rates.
The central bank has made it clear that the institution with the lowest interest rate will be given first priority while allocating the collected amount.
In order to balance the money supply and interest rate in the market, the Rastra Bank periodically exploits the accumulated liquidity using such instruments. In recent times, the central bank has been pulling money from the market due to the increase in deposits in the banks but the flow of loans has slowed.
