Kathmandu: Nepal Rastra Bank (NRB) will absorb Rs 45 billion in deposits on Wednesday through a deposit collection instrument, as excess liquidity continues to persist in the financial system.
Total deposits in the banking sector have already exceeded Rs 72 trillion. The central bank has been using deposit collection instruments and standing deposit facilities to manage surplus liquidity and stabilize interest rates in the financial system.
Class ‘A’, ‘B’, and ‘C’ banks and financial institutions licensed by NRB will be eligible to participate in the bidding process. During allocation, bids will be prioritized based on the lowest quoted interest rate, with deposits distributed sequentially up to the announced amount.
The central bank stated that the auction will be conducted online, with interest rates also determined through the bidding process. The principal and interest of the deposits collected through today’s instrument will be repaid on 21 September 2025. Banks will be able to place bids ranging from a minimum of Rs 1 billion to a maximum of Rs 5 billion, with no remainder left after allocation.
According to NRB’s open market operations guidelines, if long-term excess liquidity is observed in the financial market, the Operations Committee can use long-term deposit collection instruments with maturities of up to six months to stabilize market interest rates. Based on this provision, the central bank has been repeatedly employing such deposit collection tools to manage liquidity.
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