Kathmandu. KATHMANDU: Nepal Rastra Bank (NRB), the central bank of Nepal, has decided to collect deposit worth Rs 25 billion for a month to manage excess liquidity in the banking system.

The Monetary Management Department of the Nepal Rastra Bank (NRB) has called for bidding to collect the amount through a deposit collection tool with a period of 61 days.

According to the notice, bidding can only be done through ‘Online Bidding System Software’ (OBSS) till 3 pm today. The interest rate of deposit collection will be determined through the bidding process and the principal and interest will be paid on September 30, 2083.

According to the NRB, bidders can bid up to a minimum of Rs 10 crore and a maximum of Rs 50 million. Only the ‘A’, ‘B’ and ‘C’ class banks and financial institutions licensed by Nepal Rastra Bank are eligible to participate in the bidding process.

The amount and interest rate to be deposited should be mentioned in the bidding. According to the NRB, the bid offering the lowest interest rate will be accepted on the basis of priority and the total amount of the proposal with the same interest rate will be allocated on the basis of ‘pro-rata’ if the total amount of the proposal is more than the sum called.

The Open Market Transaction Steering Committee has the authority to approve or reject all or partial bids of the amount called by the central bank. Deposits collected cannot be counted in the Mandatory Cash Reserves (CRR) but can be counted in SLR and liquidity ratio as per the prevailing provision.