KATHMANDU: With excess funds accumulating in the banking system and weak credit demand, Nepal Rastra Bank (NRB) is set to absorb surplus liquidity once again.

The central bank will conduct a deposit collection auction of Rs 45 billion on Wednesday, with bidding scheduled at 3 p.m.

The collected funds will remain with NRB until September 21.

Only banks and financial institutions licensed under categories “A,” “B,” and “C” are eligible to participate.

Each bid must be at least Rs 1 billion, with increments of Rs 500 million allowed until the total announced amount is reached.

This intervention comes as commercial banks continue to hold large volumes of unutilized funds due to sluggish loan demand, prompting NRB to manage liquidity through its deposit collection and other monetary tools.