Rastra Bank to collect Rs 70 billion deposits, issues 61-day instrument

Kathmandu. Nepal Rastra Bank is set to issue a deposit collection instrument worth Rs 70 billion for 61 days through bidding.

According to the bank's Monetary Management Department, applications can be submitted only through the online bidding system until 3 PM today. The instrument will be issued on the same day.

Only 'A', 'B', and 'C' class banks and financial institutions licensed by Nepal Rastra Bank will be eligible to participate in the bidding. Investors can apply for a minimum of Rs 1 billion and a maximum of Rs 1 billion increments, up to the total called amount.

Multiple bids can be placed at multiple interest rates. In the interest rate bid, the amount to be deposited and the interest rate (up to four decimal places) must be specified. The deposit collection period will extend until Mangsir 23 (December 8). Principal and interest will be paid on that date.

While accepting bids, the lowest interest rate will be given priority, and if interest rates are equal, allocation will be made on a pro-rata basis. The bank has clarified that the Open Market Operations Committee reserves the right to accept or reject bids partially or fully.

The accepted bid amount will be deducted from the respective bank's account and deposited in a separate account at Rastra Bank. A warning has also been issued that institutions without sufficient balance will be blacklisted.

This amount will remain in the respective institution's investment portfolio and cannot be counted towards the mandatory Cash Reserve Ratio (CRR). However, it can be counted towards the Statutory Liquidity Ratio (SLR). Rastra Bank has also clarified that the amount cannot be refunded or pre-paid before the payment date.