Kathmandu. KATHMANDU: Nepal Rastra Bank (NRB), the central bank of Nepal, has decided to collect deposits worth Rs 100 billion today with an aim to manage excess liquidity in the market.

The Monetary Management Department of the Nepal Rastra Bank (NRB) has called for bidding to collect deposits worth Rs 100 billion through deposit collection equipment for 83 days.

Bidding will take place until 3:00 pm today through online bidding system software and the deposit collection equipment will be issued today.

According to the notice, the interest rate of the deposit collection instrument will be determined through the bidding process. The principal and interest will be paid on October 12, 2083.

Applications can be submitted from a minimum of Rs 10 crore to a total amount of Rs 10 crore. The same participant can also submit more than one bid at different interest rates.

Only the ‘A’, ‘B’ and ‘C’ class banks and financial institutions licensed by Nepal Rastra Bank are eligible to participate in the bidding. The application must mention the amount you want to deposit and the interest rate up to four digits after the decimal.

According to the central bank, the bid will be accepted up to the amount invoked, giving priority to the lowest interest rate. If the demand is high at the same interest rate, it will be allocated on the basis of ‘pro-rata’. The Open Market Trading Operation Committee shall have the right to approve or reject the entire or partial bidding.

The deposit collection equipment will be counted as an investment portfolio, the bank said. Although the amount collected cannot be counted in the Mandatory Cash Reserves (CRR), it can be calculated in the Statutory Liquidity Ratio (SLR) and Liquidity Ratio. Also, it has been clarified that there will be no pre-maturity facility before the maturity period is over.