Nepal Rastra Bank to Mop Up NPR 25 Billion to Manage Excess Liquidity

Nepal Rastra Bank (NRB) is set to mop up NPR 25 billion from the banking system today to manage excess liquidity in the financial market. The central bank has announced that it will collect deposits for a period of 16 days through an online bidding process under its deposit collection instrument. Currently, total deposits in the banking system have exceeded NPR 75 trillion. To regulate liquidity levels and stabilize interest rates, NRB has been regularly absorbing excess funds through deposit collection instruments and standing deposit facilities.

Only ‘Class A’, ‘Class B’, and ‘Class C’ banks and financial institutions licensed by Nepal Rastra Bank are eligible to participate in the bidding process. The allocation of the deposited amount will be carried out by prioritizing bids with the lowest offered interest rates until the total invited amount is fulfilled. Eligible institutions can place bids starting from a minimum of NPR 100 million, with increments divisible by NPR 50 million, up to the total announced amount.

According to NRB, the principal and interest of the deposits collected through today’s bidding will be paid on Poush 25, 2082 (mid-January 2026). As per the central bank’s open market operation guidelines, when long-term excess liquidity persists in the financial system, the Market Operations Committee is authorized to use long-term deposit collection instruments with maturities of up to six months. Based on this provision, Nepal Rastra Bank has been repeatedly deploying deposit collection instruments to manage structural liquidity in the market.