Nepal Rastra Bank has announced plans to withdraw Rs 100 billion from the banking system to manage excess liquidity. The central bank will use a 56-day deposit collection instrument for this purpose.

According to the bank, interested financial institutions can participate in the bidding process through an online system until 3 PM today.

Eligible institutions can submit bids starting from a minimum of Rs 10 crore, while the maximum allocation will be distributed in units of Rs 5 crore up to the total announced amount.

The principal and interest of this deposit instrument will be settled on Jestha 29, 2083.

Only licensed Class ‘A’, ‘B’, and ‘C’ banks and financial institutions are allowed to participate in this process.

The move is aimed at controlling excess liquidity in the market, which can otherwise lead to inflationary pressure and financial instability.