NRB Mobilizes Rs 125 Billion in Deposit Collection

Kathmandu — Nepal Rastra Bank is set to collect Rs 125 billion in deposits today (Friday) through a bidding-based deposit collection instrument, aiming to absorb excess liquidity in the financial system.

Despite nearly two weeks since the formation of a new government, excess liquidity continues to persist in the market. To manage this, the central bank is once again mopping up funds through its deposit collection tool.

With economic activity remaining sluggish for a prolonged period and recent movements further dampening credit demand, banks have been unable to significantly expand lending. Anticipating weak credit growth, banks have shown little interest in attracting deposits and have been lowering interest rates, discouraging fixed deposits.

Total deposits in the banking system have now exceeded Rs 7.8 trillion. To manage excess liquidity and stabilize interest rates, the central bank has been using instruments such as deposit collection tools and standing deposit facilities.

Only licensed ‘A’, ‘B’, and ‘C’ class banks and financial institutions are eligible to participate in the bidding process. Allocation of the long-term deposit collection amount will be prioritized based on the lowest interest rates quoted by participating institutions.

The bidding will be conducted through an online system, where interest rates will be determined competitively. The principal and interest for this deposit collection instrument will be repaid on Baisakh 2, 2083 (mid-April 2026).

The minimum bid amount is Rs 100 million, with bids accepted in multiples of Rs 50 million up to the total announced amount.

According to open market operation guidelines, when long-term excess liquidity is observed, the central bank can deploy long-term deposit collection instruments (up to six months) to manage liquidity and maintain stability in market interest rates. Nepal Rastra Bank has been repeatedly using this mechanism under the same provision.