Nepal Rastra Bank to withdraw Rs 50 billion deposit for 42 days

. KATHMANDU: Nepal Rastra Bank (NRB) is to withdraw deposit worth Rs 50 billion from the financial system on Sunday. The Nepal Rastra Bank (NRB) is going to pull deposits through the deposit collection instrument as there is continuous excess liquidity.

According to the Nepal Rastra Bank, the total deposits in the financial system have reached more than Rs 76 trillion.TAG_OPEN_p_9 The central bank has been pumping in liquidity through deposit collection instruments and fixed deposit facilities for higher liquidity and interest rate management.

Only TAG_OPEN_p_8 the ‘A’, ‘B’ and ‘C’ class banks and financial institutions licensed by the Nepal Rastra Bank will be allowed to participate in today’s bidding. While allocating the long-term deposit collection amount, the lowest bidding amount will be given priority on the basis of the interest rate bid by the participating institutions and the total amount will be allocated gradually.

According to the Nepal Rastra Bank, the bidding process for the deposit collection will be done through the online purchase system today and the interest rate will be determined through the bidding process.TAG_OPEN_p_7 It has been informed that the principal and interest of the deposit collection instrument to be bid today will be paid on March 22, 2083.

The total call amount will be up to a minimum of Rs 10 crore and a maximum of Rs 5 crore.

According to the Open Market Transactions Procedure of the Central Bank, the Transaction Steering Committee may use long-term deposit collection instruments for a maximum period of 6 months as per the need to manage the excess liquidity of long-term nature in the financial market and to manage the market interest rate.TAG_OPEN_p_5 According to this provision, the Rastra Bank has been using deposit collection tools from time to time in recent times.