Central Bank to Withdraw NPR 30 Billion from Banking System Today
Nepal Rastra Bank is set to withdraw NPR 30 billion through a 28-day deposit collection instrument today to manage excess liquidity in the banking system. Banks and financial institutions hold over NPR 1.3 trillion in investable funds.
Kathmandu. Nepal Rastra Bank is set to withdraw NPR 30 billion from the banking system today. To provide relief to banks and financial institutions reeling under excess liquidity, the central bank is withdrawing the amount through a 28-day deposit collection instrument.
According to data as of Bhadra 23, banks and financial institutions have collected NPR 83.25 trillion in deposits, while lending NPR 60 trillion during the same period. With a 71.48 percent credit-to-deposit (CD) ratio maintained during the review period, these institutions hold over NPR 1.3 trillion in investable funds.
However, the lack of demand for loans has created a liquidity management crisis. Amid this crisis, the central bank has been continuously absorbing liquidity from banks and financial institutions through deposit collection auctions.
With excess liquidity piling up in the banking system, the central bank is withdrawing NPR 30 billion today. Interested banks and financial institutions can submit online applications until 3 PM on Thursday.