The Nepal Rastra Bank has collected Rs 25 billion in two-month deposits to manage excess liquidity in the banking system.
The central bank’s monetary management department issued a notice on Friday, inviting bids for the 61-day deposit collection through the online bidding system software.
According to the notice, the interest rate for the deposit collection will be determined through the bidding process, and the principal amount along with interest will be paid on Ashoj 14, 2083.
The Nepal Rastra Bank has stated that banks and financial institutions with a ‘C’, ‘Kh’, and ‘G’ rating can participate in the bidding process, with a minimum bid of Rs 10 crore and a maximum bid of Rs 5 crore.
The bidding process requires participants to specify the amount they wish to deposit and the interest rate they are willing to accept.
The Nepal Rastra Bank has stated that it will prioritize bids with the lowest interest rate and allocate the deposited amount on a pro-rata basis if the total amount bid exceeds the amount called.
The central bank has also stated that the deposited amount will not be included in the calculation of the cash reserve ratio (CRR) but will be included in the calculation of the statutory liquidity ratio (SLR) and liquidity ratio.
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