NRB Moves to Mop Up Massive Rs. 120 Billion as Banking System Overwhelmed with Excess Cash

Nepal Rastra Bank (NRB) has announced its intention to collect Rs. 120 billion in deposits from banks and financial institutions through a bidding process today. This move is part of the central bank's ongoing efforts to manage excess liquidity within the country's banking system. The 97-day deposit collection is scheduled for Baisakh 17 (April 30) through NRB's online bidding system.

Licensed 'A', 'B', and 'C' class financial institutions are eligible to participate, with a minimum bidding amount of Rs. 10 crore. The interest rate for these deposits will be determined through the competitive bidding process. Once bids are accepted, the funds will be transferred from the participating institutions' accounts to a separate account at the central bank. These deposits are set to mature on August 5, 2026 (Shrawan 20, 2083), at which point the principal and interest will be returned.

NRB clarified that while these deposits cannot be used to satisfy the Cash Reserve Ratio (CRR) requirements, they will be considered when calculating other liquidity measures. The central bank also noted that early withdrawals are not permitted and warned that institutions must maintain sufficient balances on the settlement date to avoid potential restrictions on future bidding participation.