NRB to Conduct Bidding for Deposit Collection of Rs. 50 Arba to Address Excess Liquidity From Shrawan 02

Nepal Rastra Bank (NRB) has announced its intention to collect deposits amounting to Rs. 50 Arba through a public bidding process, set to take place on 2nd Shrawan, 2081. This initiative aims to address the prevailing excess liquidity in the market. The bidding will be conducted through the Online Bidding System Software until 3:00 PM on the specified date. The details and terms of the deposit collection are as follows:

1. Details are as follows: 

a) Instrument Name: Deposit Collection
b) Amount: Rs. 50 Arba 
c) Bidding Date: Until 3:00 PM, 2nd Shrawan, 2081
d) Issuance Date: 2nd Shrawan, 2081
e) Interest Rate: To be determined through bidding
f) Principal and Interest Payment Date: Shrawan 23, 2081
g) Minimum Bid Amount: Rs. 10 crores, with increments in multiples of Rs. 5 crores
h) Collateral: Can be used as collateral at banks and financial institutions other than the issuing bank.

2. Bids must specify the interest rate. Multiple bids with different interest rates are allowed.

3. Only Class "A", "B", and "C" banks and financial institutions licensed by the Nepal Rastra Bank are eligible to participate.

4. Bids must include the amount to be deposited and the interest rate (up to four decimal places).

5. Allocations will prioritize bids with the lowest interest rates up to the total announced amount.

6. In case of identical interest rates exceeding the total amount, allocation will be on a pro-rata basis.

7. The committee reserves the right to accept or reject any or all bids, in whole or in part.

8. Accepted bid amounts will be debited from the counterparty's account with the NRB, and a separate account will be opened for the collected deposits.

9. Counterparties with insufficient account balances on the issuance date will be blacklisted and barred from future bids.

10. The collected deposit amount, along with the applicable interest, will be credited to the respective bank's NRB account on the payment date.

11. The collected deposit will be part of the investment portfolio and will not count towards the Cash Reserve Ratio (CRR). However, it can be included in the Statutory Liquidity Ratio (SLR) and Liquidity Ratio as per NRB guidelines.

12. Premature repayment of the collected deposit before the maturity date will not be permitted.