Rastra Bank has said that it is going to withdraw the amount for 21 days through the deposit collection tool for excess liquidity management.
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Banks and financial institutions have not stopped the process of increasing the amount of money that can be loaned (liquidity). In this way, after increasing the amount of loans that can be given every day, the National Bank is going to withdraw 50 billion rupees from the financial system today as well. Rastra Bank has said that it is going to withdraw the amount for 21 days through the deposit collection tool for excess liquidity management.
In order to withdraw money from the market, the National Bank has invited banks and financial institutions to talk online till 3 pm today. It is mentioned in the notification of Rashtra Bank that when dividing by Rs.
Only 'A', 'B' and 'C' category banks and financial institutions will be allowed to participate in the deposit collection device. The National Bank has also said that the deposit collection equipment purchased in this way can be used as collateral in other banks and financial institutions.
Rastra Bank has said that the negotiation of deposit collection will be done on the interest rate and multiple interest rates can also be negotiated on multiple interest rates.
To ensure that the interest rate does not fluctuate abnormally but remains within the desired limit, the National Bank has launched the 'Interest Rate Corridor'. Under the corridor, three limits of interest rates are fixed, upper, middle and lower. At present, the upper limit (ceiling rate) has been maintained at 6 percent. This rate is the interest rate paid by banks and financial institutions when they take loans from the National Bank. The middle rate (policy rate) is 4.5 percent. It is the overnight repo rate at which banks borrow for one day. The lower limit floor rate) has been maintained at 2.75 percent. This is the interest rate that banks and financial institutions get when the National Bank withdraws money from the market through deposit collection.
The upper and lower limit rates of the corridor have been adjusted by the National Bank to match the inter-bank interest rates. Therefore, the National Bank tries to keep the interbank rate around the policy rate as much as possible. Even if this is not possible, it tries to keep within the lower and upper limits of the corridor. At the same time, when the interbank rate falls to the lower limit, the National Bank withdraws money from the market through various instruments.
When the interbank interest rate approaches the upper limit, the central bank sends money to the market through various instruments. Currently, since the interbank interest rate has been lower than the lower limit of the corridor for 2 and a half years, the National Bank is drawing money through various tools.
