Nepal Rastra Bank to Collect Rs 35 Billion in Six-Month Deposits

Kathmandu. Nepal Rastra Bank is to collect deposits worth Rs 35 billion from banks and financial institutions. Issuing a notice today, the central bank stated that it is issuing a deposit collection instrument for 180 days through bidding. The bidding will take place today until 3:00 PM only through the online bidding system software. The issuance date of the deposit collection instrument has also been set for today. The interest rate on this deposit will be determined through bidding. The principal and interest will be paid on the upcoming February 3. In the bidding, it is possible to bid a minimum of Rs 100 million and thereafter in multiples of Rs 100 million up to the maximum amount called. Only 'A', 'B', and 'C' class banks and financial institutions licensed by the central bank can participate in the deposit collection bidding. In the bidding, the amount to be deposited and the interest rate must be mentioned. According to the central bank, when allocating the called amount, it will be allocated starting with the lowest interest rate up to the called amount. If the amount of bids with the same interest rate exceeds the total issued amount, the allocation will be made on a pro-rata basis. The open market operations committee of the central bank will have the right to accept or reject the bid, in whole or in part, of the called amount. The amount of the accepted bid will be spent from the account of the respective bank and financial institution in the central bank and deposited in a separate deposit account. If a bank or financial institution whose bid is accepted does not have sufficient balance in its account on the day the instrument is issued, such an institution will be blacklisted and banned from participating in future biddings. On the payment date of the deposit collection, the deposit amount along with the specified interest will be deposited in the central bank account of the respective bank. The central bank has stated that the collected deposit amount can be counted as an investment portfolio of the respective bidder but cannot be counted in the mandatory cash reserve ratio (CRR). However, it can be counted in the statutory liquidity ratio (SLR) and liquidity ratio that must be maintained as per the central bank's directive.