Nepal Rastra Bank to Withdraw Rs 60 Billion to Manage Excess Banking Liquidity

10th July 2026, Kathmandu

Nepal Rastra Bank has officially announced its decision to withdraw 60 billion rupees from the national financial market.

NRB to Withdraw 60B

The regulatory intervention comes as surplus liquidity continues to pile up across commercial ledgers due to persistently weak credit demand from the private sector.

The central bank will absorb the massive cash pile through its short-term monetary management window.

Local financial experts noted that the liquidity mop-up helps keep the interbank interest rate stable and prevents unhelpful credit market fluctuations.

Competitive Bidding Guidelines for Financial Institutions

The liquidity extraction campaign was organized by the Monetary Management Department of the central banking authority.

The institutional auction was scheduled to close at 3:00 PM on Friday, utilizing the automated Online Bidding System Software.

The central bank structured a clear series of participation parameters for interested financial groups:

• Minimum layout: Commercial entities looking to park their idle funds must submit base bids starting at a minimum value of 100 million rupees.
• Bidding increments: Additional bidding offers are accepted in structured matching increments of 50 million rupees up to the total specified amount.
• Class restrictions: Participation rights are strictly limited to Class A commercial banks, Class B development banks, and Class C finance companies licensed under national laws.

The bidding window follows an interest rate bidding system, giving participants the opportunity to submit multiple bidding sheets at varying returns.

The final cutoff yields are determined through open market forces, reflecting the overall volume of cash available within the treasury rooms.

Fixed Maturity Windows and System Repayment Paths

The newly introduced 19-day deposit collection instrument will officially settle on the same working afternoon.

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According to the official circular instructions, the short-term instrument will reach its final maturity date on October 9.

Upon hitting the designated maturity date, the central bank will automatically repay the complete principal amount along with all accrued interests.

The cash routing will flow directly back into the clearing accounts maintained by the respective commercial houses at the central register.

Addressing Sluggish Credit Demands Across Key Industries

The central bank has been regularly intervening to absorb idle cash from the domestic financial ecosystem over the past fiscal quarters.

The continuous build-up of cash balances happens because retail credit expansion remains sluggish across manufacturing, trading, and infrastructure lines.

With limited opportunities to deploy corporate credit safely, domestic commercial operations have been routinely placing their surplus cash with the regulator.

These massive low-risk placements typically yield internal yields hovering near the three percent mark.

The primary objective behind these continuous liquidity adjustments is to protect the underlying stability of the wider financial system.

By taking out excess cash reserves, the regulator prevents speculative currency movements, keeps short-term yields within safe bounds, and ensures that banking firms maintain balanced portfolio returns until industrial economic momentum picks up across all seven provinces.

For More: NRB to Withdraw 60B