The Nepal Rastra Bank has amended the existing provisions related to the Permanent Deposit Facility (SDF) to allow banks and financial institutions to deposit money with the National Bank on a daily basis.
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Banks and financial institutions will now be able to keep more than their required amount (excess liquidity) with the National Bank on a daily basis.
The National Bank has amended the existing arrangement related to the Permanent Deposit Facility (SDF) to allow banks and financial institutions to keep money with the National Bank on a daily basis. Earlier, banks and financial institutions were getting this facility only 2 days a week. Now, banks and financial institutions will get this facility on all days when the National Bank is open.
The National Bank has amended the arrangement related to the SDF mainly to prevent the lower limit of the interest rate corridor from decreasing too much and to facilitate banks and financial institutions in managing their excess deposits.
‘Information on the review of the arrangement for providing permanent deposit facilities, as per the decision of 2083 Jestha 12, the permanent deposit facility provided by the National Bank to banks and financial institutions of categories ‘A’, ‘B’ and ‘C’ will be provided every day during banking business hours, effective from Jestha 13 (Wednesday),’ the National Bank has said. The Rastra Bank has also stated that the principal and interest amount of the facility provided in this way will be deposited in the account of the concerned institution after 3 pm the next day.
Rastra Bank has been regularly collecting deposits and withdrawing money through SDF for the last three years. In the same vein, Rastra Bank is going to provide SDF facility every day.
