Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: The central bank Nepal Rastra Bank has announced plans to invest Rs 9.35 billion from its staff gratuity and pension funds in fixed deposits for a one-year term, aiming to place the money in licensed banks and financial institutions.
The central bank said the funds will be deposited as term deposits and has invited interested banks and financial institutions to apply. Applications can be submitted on Falgun 10, 2082 BS, between 10:00 AM and 12:00 PM.
Allocation across financial institutions
According to the notice, the investment will be distributed across different categories of financial institutions:
Rs 7.48 billion allocated to commercial banks
Rs 1.4025 billion allocated to development banks
Rs 467.5 million allocated to national-level finance companies
Eligibility criteria for banks
The central bank has set strict financial health requirements for institutions seeking the deposit. Banks and financial institutions must ensure their non-performing loans (NPLs) do not exceed 8 percent of total lending.
Other conditions include:
At least two years of operation completed
Maintenance of the minimum capital adequacy ratio set by the regulator
Compliance with the required net liquidity ratio
Credit-deposit ratio within limits prescribed by the central bank
Net profit recorded in the most recent fiscal year
If previously under prompt corrective action, at least six months must have passed since its removal
Legal and compliance conditions
The central bank has also required that applying institutions must not have been declared problematic under Section 86(Kha) of the Nepal Rastra Bank Act, 2002 (2058 BS). If previously designated as problematic, at least six months must have passed since the status was lifted.
Additionally, eligible institutions must have already issued the portion of shares reserved for the general public.
The move comes as the central bank continues to manage institutional funds while simultaneously injecting liquidity into the banking system through controlled placements in the financial sector.
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