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System Liquidity Management: Central Bank to Mopping Up Rs 100 Billion via Deposit Collection Today

Nepal Rastra Bank (NRB) is set to float a 19-day deposit collection instrument worth Rs 100 billion to absorb excess liquidity from the banking sector through an automated online bidding mechanism.

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System Liquidity Management: Central Bank to Mopping Up Rs 100 Billion via Deposit Collection Today

In a bid to manage surplus liquidity within the financial system, Nepal Rastra Bank (NRB) has announced the issuance of a deposit collection instrument worth Rs 100 billion today. According to the central bank's notice, licensed 'A', 'B', and 'C' class financial institutions can participate in the competitive bidding process scheduled for June 12 (Jestha 29) via the online auction platform. The funds will be held for a tenure of 19 days, with the final interest rate determined through a market-driven bidding process where institutions must specify both their desired deposit volumes and expected yields. The minimum bidding threshold is fixed at Rs 100 million (10 Crore), with incremental limits in multiples of Rs 50 million (5 Crore) up to the aggregate issue size. The principal, along with the accrued interest, is scheduled for maturity on July 1, 2026 (Ashad 17, 2083). NRB clarified that while these funds will not qualify toward the Cash Reserve Ratio (CRR) mandates, they will be counted toward other mandatory liquid asset computations. Early withdrawals are strictly prohibited, and institutions must maintain sufficient clearing balances on the settlement date to avoid being barred from future liquidity management operations.

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