Nepal Rastra Bank to Withdraw NPR 60 Billion from the Banking System on Monday

Nepal Rastra Bank (NRB), the central bank of Nepal, has announced it will withdraw NPR 60 billion in deposits from the banking system on Monday through a deposit collection auction. This move comes as excess liquidity continues to remain in the banking sector since the beginning of the current fiscal year 2081/82.

According to NRB, the withdrawal will be conducted through the online bidding system, and the interest rate will be determined through competitive bidding. The collected amount, including both principal and interest, will be settled on Shrawan 18, 2082 (August 2, 2025).

Key Auction Details

• Total Amount: NPR 60 billion
• Minimum Bid Amount: NPR 100 million
• Bid Increments: Must be divisible by NPR 50 million
• Eligible Participants: Class ‘A’, ‘B’, and ‘C’ licensed banks and financial institutions
• Auction Method: Competitive bidding via NRB’s online platform
• Maturity & Settlement Date: Shrawan 18, 2082

Why Is the Central Bank Taking This Step?

As per NRB, the banking system is currently holding excessive liquidity, with total deposits crossing NPR 7 trillion. However, this liquidity is not being effectively utilized, as loan disbursement has remained slow. This reflects a lack of investor confidence and limited credit demand in the economy.

To control liquidity and stabilize the financial market, NRB has been consistently withdrawing funds using monetary tools since the start of the fiscal year. Tools like reverse repo, outright sale, deposit collection, and bond issuance are being used depending on the situation, whether there is too much or too little money in the system.

Recent Trends in Liquidity Control

Last week alone, NRB withdrew NPR 90 billion in a single day, highlighting the ongoing efforts to manage surplus liquidity. The central bank is using such actions not only when there is an overflow of money but also in times of shortage, to maintain balance in the financial system.

Conclusion

The decision to withdraw NPR 60 billion on Monday shows that Nepal Rastra Bank is actively managing liquidity to ensure financial stability. With a large amount of unused funds in the system, these measures are crucial to prevent inflation, reduce financial risk, and encourage more effective use of capital in the economy.