The updated directive introduces key operational changes aimed at standardizing liquidity management across the banking sector:
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Shift to Fully Digital Transactions: Paper-based applications for open market operations are being phased out in favor of an electronic bidding system designed to remove manual processing errors and improve transaction speeds.
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Strict Penalties for Non-Compliance: Banks and financial institutions (BFIs) that fail to settle approved transactions, miss security submission deadlines, or breach established procedures face a 2.50% financial penalty alongside an automatic six-month suspension from participating in open market operations.
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Weekly Reviews & Pro-Rata Allocations: The Open Market Trading Operation Committee (OMC) will now convene every Friday to monitor market liquidity fluctuations. Bidding limits are set at a minimum of NPR 10 crore, with oversubscribed bids at identical interest rates to be distributed on a pro-rata basis.
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Broader Instrument Spectrum: The guidelines formally accommodate multi-interest rate structures for long-term repos and deposit collection instruments of up to six months, while standardizing transfer and settlement processes for Treasury bills.
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Updated Capital Accounting Rules: Mobilized liquidity from repo or deposit collections can be parked in investment portfolios and counted toward Statutory Liquidity Ratio (SLR) and total deposit requirements. However, these funds remain strictly excluded from Cash Reserve Ratio (CRR) calculations.
NRB stated that publicizing all market activity directly on its website under the new framework will enhance regulatory transparency and support broader monetary policy execution.
