KATHMANDU: Nepal Rastra Bank is set to withdraw Rs 30 billion in liquidity from the banking system today.
The central bank is utilizing a 28-day deposit collection instrument to manage excess liquidity currently held by banks and financial institutions.
The move comes as financial institutions face challenges in liquidity management due to low demand for loans.
Data up to Sept. 9 shows that banks and financial institutions had collected Rs 8.325 trillion in deposits while extending Rs 6 trillion in loans.
During this period, the credit-to-deposit ratio stood at 71.48 percent, leaving banks with over Rs 1.3 trillion in investable funds.
To address the accumulation of excess liquidity, the central bank has been regularly absorbing funds through deposit collection auctions.
Interested banks and financial institutions were required to submit their online applications for today’s auction by 3 p.m. on Thursday.
