Nepal Rastra Bank to Collect Rs. 60 Billion Through 31-Day Deposit Auction
Nepal Rastra Bank (NRB) is set to raise Rs. 60 billion through a 31-day deposit collection instrument via a competitive bidding process as part of its monetary liquidity management.
The central bank’s Monetary Management Department has called for bids from eligible banks and financial institutions for the deposit collection instrument, which will have a maturity period of 31 days.
According to the notice issued by NRB, participating banks and financial institutions must submit their bids by 3:00 PM today through the central bank’s Online Bidding System (OBSS).
The deposits will be collected at the interest rate determined through the bidding process, with both principal and interest scheduled to be repaid on Bhadra 22.
Eligible institutions can submit bids starting from a minimum of Rs. 10 crore, with bid amounts required to be in multiples of Rs. 10 crore, up to the total amount called by the central bank.
NRB will allocate the deposit collection amount by giving the highest priority to bids offering the lowest interest rate. Allocation will continue sequentially based on the quoted interest rates until the announced amount is fully allocated.
If demand exceeds the amount available at the same interest rate, the amount will be allocated among the respective bidders on a pro-rata basis.
Only Class ‘A’, ‘B’, and ‘C’ banks and financial institutions licensed by Nepal Rastra Bank are eligible to participate in the auction. Bidders are required to specify both the amount they wish to deposit and the interest rate they are willing to accept.
According to NRB, the amount corresponding to accepted bids will be debited from the respective counterparty's account maintained at Nepal Rastra Bank and deposited into a separate account designated for the collected deposits.
On the maturity date, the principal amount along with the applicable interest will be credited to the respective bank or financial institution's account maintained at NRB.
The collected deposit amount cannot be included in the investment portfolio of the respective bidder. However, it may be counted toward the Statutory Liquidity Ratio (SLR) and liquidity ratio requirements as prescribed by Nepal Rastra Bank.
The participating institutions will not be allowed to withdraw, return, or seek premature repayment of the collected deposits before the scheduled maturity date. The latest deposit collection auction is part of NRB's ongoing liquidity management operations, through which the central bank regulates liquidity in the banking system and helps maintain monetary and financial stability.
