After more money, the National Bank is withdrawing 50 billion from the market today

The National Bank of India has called on banks and financial institutions to conduct online consultations for deposit collection purchases today (Wednesday) till 3:00 p.m. It is mentioned in the notification of Rashtra Bank that when dividing by Rs.

The Rastra Bank has stated that while deposit collection will be negotiated on the interest rate, multiple interest rates can also be negotiated. Only 'A', 'B' and 'C' category banks and financial institutions are allowed to participate in deposit collection instruments. The National Bank has also stated that the deposit collection equipment purchased in this way can be used as collateral in other banks and financial institutions.

After the inter-bank rate fell below three percent, the National Bank has said that it is going to withdraw money from the market again. According to the current system, when the interbank rate is below three percent, the National Bank has to withdraw money from the market, and when it exceeds 7 percent, it has to send money to the market. This process is called interest rate corridor. In order to ensure that there is no unnatural change in the interest rate and to maintain stability, the National Bank has implemented the interest rate corridor.

Likewise, because there is a lot of money in the financial system, the National Bank is withdrawing money from the market every day in order to prevent the interest rate from falling too low.

Meanwhile, the Rastra Bank has withdrawn 28 trillion 45 billion 85 crore rupees till last week for liquidity management (to keep money in the financial system according to market demand) from last November to Friday. During that period, the National Bank has withdrawn 11 trillion 50 billion 30 crore rupees from the market through deposit collection equipment and 16 trillion 95 billion 55 crore rupees through permanent deposit facility (SDF).

Most of the mentioned amount has matured and returned to the market, while till last week 1 trillion 81 billion 55 crore rupees was in investment (outstanding). The National Bank withdraws and remits money for a very short period of time so that banks can use it when needed. Therefore, the process of withdrawing and sending money in this way is called short-term liquidity management. Pitambar Bhandari, Head of Nepal Rashtra Bank's Monetary Management Department, said that in order to keep the interest rate within the desired limits without allowing abnormal fluctuations, the National Bank is drawing money from the market as needed through various monetary instruments.