Nepal Rastra Bank to Collect Rs 30 Billion Through 28-Day Deposit Auction

Nepal Rastra Bank (NRB) will collect Rs 30 billion in deposits through a 28-day deposit collection instrument as part of its open market operations.

According to a notice issued by the central bank, the auction will be conducted on Ashwin 21, 2083 through the Online Bidding System Software (OBSS). The instrument will mature on Kartik 18, 2083.

The interest rate for the deposit collection instrument will be determined through competitive bidding. Eligible banks and financial institutions can submit multiple bids at different interest rates.

The minimum bid amount has been fixed at Rs 100 million, while bids must be in multiples of Rs 100 million, up to the total called amount of Rs 30 billion.

The allocation will begin with bids offering the lowest interest rate, continuing sequentially until the total amount called by NRB is allocated. If bids at the same interest rate exceed the amount available, allocation will be made on a pro-rata basis.

Only Class A, Class B and Class C banks and financial institutions licensed by Nepal Rastra Bank are eligible to participate in the auction.

NRB's Open Market Operations Committee will have the authority to accept or reject all or part of the bids received.

The funds collected through the instrument will form part of the respective bidders' investment portfolios 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 permitted under NRB directives.

The deposit amount cannot be withdrawn or repaid before the maturity date. On maturity, the principal along with the applicable interest will be credited to the respective bank's account maintained at NRB.

NRB has also warned that if an accepted bidder does not have sufficient funds in its account on the issue date, it may be blacklisted and barred from participating in subsequent auctions.