Nepal Rastra Bank (NRB) has withdrawn an additional NPR 40 billion from the banking system to manage liquidity. The central bank has planned to withdraw this amount for 21 days through auction instruments on Wednesday. As liquidity flows increase, the NRB continues to withdraw money from the market.

Key Details of Liquidity Management:

Wednesday: NPR 40 billion withdrawn for 21 days.
Shrawan 2: NPR 50 billion withdrawn from the banking system.
Shrawan 9: NPR 40 billion withdrawn; NPR 40 billion mobilized through deposit collection instruments.
Shrawan 16: NPR 40 billion withdrawn from commercial banks for the period from Shrawan 16 to Bhadra 5.
Shrawan 23: NPR 40 billion withdrawn.
Bhadra 2: NPR 100 billion withdrawn.
Bhadra 12: NPR 40 billion withdrawn.
Bhadra 19: NPR 40 billion withdrawn.
Bhadra 23: NPR 100 billion withdrawn from the market.

Impact on Interest Rates and Loans:

Banks have started reducing interest rates on loans and deposits as credit expansion has not met expectations.
Since the beginning of the current fiscal year 2081/82, the Nepal government has withdrawn NPR 490 billion from the market.

Rules for Deposits:

Banks and financial institutions can bid for the total called amount, with a minimum deposit of NPR 10 million and a maximum of NPR 50 million, divided in a way that there are no remaining parts.

This liquidity management helps control the flow of money in the banking system and maintain economic stability. Banks are addressing the liquidity crisis by adjusting the interest rates on loans and deposits.