Nepal Rastra Bank Launches NPR 25 Billion Liquidity Absorption from Banks

Kathmandu – Nepal Rastra Bank (NRB) is set to absorb NPR 25 billion from banks and financial institutions today through a bidding process at 3 PM. The central bank will withdraw the amount for a tenure of 56 days, allowing commercial banks, development banks, and finance companies to participate. Participating institutions must submit their interest rate proposals, and competitive bidding will determine the lowest rate, which will receive priority. Currently, banks hold excess liquidity, and NRB has been managing this by periodically absorbing funds through such bids. In today’s auction, banks can bid in multiples of NPR 100 million, up to a maximum of NPR 500 million, and the deposits placed with NRB can also be used as collateral in other banks or financial institutions. The principal and interest will be repaid to the banks on Jestha 20. With low demand for loans, this move provides an effective option for banks to manage liquidity efficiently.