Nepal Rastra Bank to Absorb Rs 30 Billion via 28-Day Deposit Auction
Nepal Rastra Bank will conduct a 28-day deposit collection auction on Ashwin 21, 2083, aiming to mop up Rs 30 billion from Class A, B, and C financial institutions. The auction, managed through the Online Bidding System Software, will use competitive bidding with a minimum bid of Rs 100 million, and the funds will count toward SLR but not CRR.
Nepal Rastra Bank (NRB) is set to withdraw Rs 30 billion from the banking system through a 28-day deposit collection auction, as part of its ongoing open market operations.
According to a notice issued by the central bank, the auction will take place on Ashwin 21, 2083, using the Online Bidding System Software (OBSS). The instrument will mature on Kartik 18, 2083.
The interest rate for the deposit will be determined through competitive bidding, with eligible banks and financial institutions allowed to submit multiple bids at different rates. The minimum bid amount is Rs 100 million, and bids must be in multiples of Rs 100 million, up to the total called amount of Rs 30 billion.
Allocation will start from the lowest interest rate bids and continue until the full amount is allocated. If bids at the same rate exceed the remaining amount, a pro-rata allocation will be applied.
Only Class A, Class B, and Class C banks and financial institutions licensed by NRB are eligible to participate. The NRB's Open Market Operations Committee reserves the right to accept or reject any or all bids.
- The funds collected will be part of the bidders' investment portfolios.
- They cannot be counted toward the Cash Reserve Ratio (CRR).
- However, they can be counted toward the Statutory Liquidity Ratio (SLR) and liquidity ratio as per NRB directives.
The deposit cannot be withdrawn before maturity. On maturity, the principal plus interest will be credited to the respective bank's account at NRB. NRB has warned that accepted bidders with insufficient funds on the issue date may be blacklisted and barred from future auctions.