Is Liquidity Too High? NRB Seeks to Absorb Rs. 120 Billion from Banks Today

Nepal Rastra Bank (NRB) has announced that it will collect deposits worth Rs. 120  billion from banks and financial institutions through a bidding process.

According to a notice published today, the central bank will collect the deposits for a period of 19 days. The bidding will take place on Baisakh 11 (April 24) through the Online Bidding System. The interest rate will be decided through the bidding process. Banks and financial institutions will need to mention both the amount they want to deposit and the interest rate they are offering. The minimum amount for bidding has been set at Rs. 10 crore, while the maximum limit is (In multiples of) 5 Crore, up to the total issue amount. However, institutions can submit multiple bids within the total announced amount.

Only licensed ‘A’, ‘B’, and ‘C’ class banks and financial institutions approved by NRB are allowed to take part in the bidding. The deposits collected will be returned along with interest on Baisakh 30 (May 13, 2026). The central bank has stated that once the bids are accepted, the amount will be directly deducted from the participating institutions’ accounts and kept in a separate account at NRB. If any institution fails to maintain sufficient balance on the settlement day, it may face restrictions from participating in future bids.

NRB also clarified that the deposited amount will not be counted as cash reserve ratio (CRR), but it will be considered while calculating other required liquidity measures. The central bank further noted that early withdrawal of the deposited amount will not be allowed before the maturity date. NRB said this move is part of its regular efforts to manage excess liquidity in the banking system.