Nepal Rastra Bank (NRB) is preparing to absorb Rs 40 billion from the financial system in an effort to manage the growing excess liquidity in the banking sector. The central bank will mobilize the funds through its short-term monetary instrument via a 49-day deposit collection process.

According to NRB, licensed commercial banks and financial institutions from ‘A’, ‘B’, and ‘C’ categories are eligible to participate in the bidding process. Interested institutions can submit their bids through the online bidding system by 3 PM today.

The minimum bid amount has been set at Rs 10 crore, while applications must be submitted in multiples of Rs 5 crore in a manner that divides evenly into the total offered amount.

The principal and interest of the collected amount will be repaid on the upcoming Asar 3, as stated by the central bank.

NRB has been regularly using such monetary instruments to maintain liquidity balance in the banking system, ensure interest rate stability, and support overall monetary stability in the economy.