Kathmandu- To address the excess liquidity in the banking sector, Nepal Rastra Bank (NRB) used a deposit collection instrument as a monetary instrument to mop up Rs 35 billion from financial institutions through a competitive bidding process on  April 13. 

According to the notice issued today, the bidding has been conducted via the Online Bidding System Software (OBSS), starting at 3:00 PM on Monday.

Banks and financial institutions categorized as A, B, and C are eligible to participate. The central bank will prioritize bids with the lowest interest rates, as per NRB's notice.

The bidding amounts must range from a minimum of Rs 100 million to a maximum of Rs 50 billion, with incremental increases up to the total amount.

The deposits will have 56-day maturity period, with the principal and interest payable on June 8.

The notice further clarifies that funds raised through the deposit will be considered part of the successful bidders’ investment portfolio and will not be included in the cash reserve ratio (CRR).

However, they may count toward the statutory liquidity ratio (SLR) or liquidity ratio based on the NRB's directives.