Nepal Rastra Bank (NRB) has decided to invest NPR 2.19 billion in the fixed deposits of banks and financial institutions.
NRB 366-Day Fixed Deposit
The funds, sourced from the bank’s grants and pension fund, will be distributed across commercial banks, national-level development banks, and national-level financial companies. This move is aimed at managing liquidity in the financial sector and strengthening the economy.
Allocation of the Funds
Out of the total NPR 2.19 billion, NRB will allocate NPR 1.75 billion to commercial banks, NPR 328.5 million to national-level development banks, and NPR 109.5 million to national-level financial companies. NRB has invited these institutions to submit proposals for the interest rates on their fixed deposits. Interested banks and financial institutions must submit their interest rate proposals by Magh 29, 2025 (February 11, 2025).
Terms of the Fixed Deposit
The fixed deposits will be held for 366 days, starting from Falgun 6, 2081 (February 18, 2025) and ending on Falgun 6, 2082 (February 18, 2026). This fixed deposit scheme will provide a stable investment opportunity for banks and financial institutions.
Eligibility Criteria for Banks and Financial Institutions
The participating banks and financial institutions must meet certain conditions. First, the institutions must have been in operation for at least two years. Second, they must maintain a minimum capital adequacy ratio, as set by NRB. Finally, the institutions must ensure that their non-performing loan (NPL) ratio is under 5% of the total loans. These requirements aim to ensure that only financially sound institutions benefit from the investment.
Submission of Interest Rate Proposals
NRB has officially called on banks and financial institutions to propose interest rates for these fixed deposits. The institutions must submit their proposals by Magh 29, 2025(February 11,2025). These proposals will help determine the terms and financial arrangements of the investment for the coming year.
Strengthening the Financial Sector
This move by NRB is expected to improve liquidity management and contribute to the overall growth and stability of Nepal’s financial sector. By involving both commercial banks and financial companies, the central bank aims to ensure a more diversified and stable investment environment.
Focus on Financial Stability
Through this fixed deposit scheme, NRB seeks to support the financial institutions while maintaining liquidity in the market. The decision is part of the central bank’s ongoing efforts to promote stability and growth in Nepal’s banking and financial sector.
For more: NRB 366-Day Fixed Deposit