Kathmandu, June 11: Even though the government claims that a favorable investment environment has been created, private sector investment has not increased, leading to a significant accumulation of funds in banks once again.
Due to the excess liquidity in banks, Nepal Rastra Bank (NRB) has announced that it will withdraw Rs 40 billion from the banking system today, Wednesday. In response to this surplus liquidity in the market, the central bank has been repeatedly withdrawing deposits from the banking system.
Nepal Rastra Bank has scheduled a bidding session for today at 3 PM for a 21-day deposit collection. The minimum bid amount is Rs 100 million, and bids must be made in multiples of Rs 50 million. The principal and interest payments are set to be settled on Asar 18 (Nepali calendar). The interest rate for the deposit will also be determined through the bidding process.
According to the central bank, the interest rate for deposit collection will be set through a competitive bidding process. Multiple bids with varying interest rates will also be allowed.
Only ‘A’, ‘B’, and ‘C’ class banks and financial institutions licensed by Nepal Rastra Bank are eligible to participate in the bidding. Just last Sunday, the central bank had withdrawn Rs 20 billion as well. #nepal #NRB #liquidity
