Nepal Rastra Bank, the central bank of Nepal, is set to auction a one-month deposit collection tool worth Rs 60 billion through a bidding process.
The Monetary Management Department of the bank has announced that the bidding process will be conducted for a period of 31 days. Banks and financial institutions interested in participating in the bidding process must submit their bids through the bank’s online bidding system by 3 pm today.
The interest rate to be determined through the bidding process will be used to collect deposits, and the principal amount along with interest will be paid on Ashar 22, 2083.
Bidding Process
The bidding process will allow participants to bid for a minimum of Rs 10 crore and a maximum of Rs 10 crore, up to the total amount called. The bids will be settled based on the lowest interest rate mentioned, and in case of equal interest rates, the bids will be settled on a pro-rata basis.
Only ‘A’, ‘B’, and ‘C’ class banks and financial institutions licensed by Nepal Rastra Bank are eligible to participate in the bidding process. Participants must mention the amount they want to collect and the interest rate in their bids.
Payment and Settlement
The amount accepted through the bidding process will be deducted from the counterparty’s account at Nepal Rastra Bank and deposited into a separate account. The principal amount along with interest will be paid to the participating bank’s account at Nepal Rastra Bank on the maturity date.
The collected deposit amount will not be included in the investment portfolio of the participating bank. However, it can be included in the calculation of the Statutory Liquidity Ratio (SLR) and liquidity ratio as per the direction of Nepal Rastra Bank.
The collected deposit amount cannot be prepaid or paid before the maturity date.
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