NRB to Collect Rs. 18 Billion Through 28-Day Deposit Collection Instrument

Nepal Rastra Bank (NRB) is set to issue a Rs. 18 billion “One-Month Deposit Collection Instrument” to manage excess liquidity in the banking system. The instrument will have a maturity period of 28 days and will be issued through an auction process. According to the NRB’s Monetary Management Department, bidding will remain open until 3:00 PM on Ashoj 16, 2083. Interested banks and financial institutions must submit their bids through the central bank’s Online Bidding System Software (OBSS). The instrument will be issued on Ashoj 16, while the principal and interest will be repaid on Kartik 13, 2083. The interest rate will be determined through the auction, with participants allowed to submit bids at multiple interest rates. Only Class A, Class B, and Class C banks and financial institutions licensed by NRB will be eligible to participate. Each institution can bid for a minimum of Rs. 10 crore, with bids required to be in multiples of Rs. 10 crore, up to the total issue amount of Rs. 18 billion. For allotment, bids offering the lowest interest rate will receive priority. If bids at the same interest rate exceed the total amount offered, the allocation will be made on a pro-rata basis. The funds collected through the instrument will be treated as part of the bidder’s investment portfolio and cannot be counted toward the Cash Reserve Ratio (CRR). However, they can be counted toward the Statutory Liquidity Ratio (SLR) and Liquidity Ratio as per NRB regulations. The deposit can also be used as collateral with banks and financial institutions other than Nepal Rastra Bank. However, NRB has stated that premature repayment will not be allowed before the specified maturity date.