September 24: Nepal Rastra Bank (NRB) has decided to issue a repurchase agreement (repo) worth Rs 30 billion to address the shortage of investment capital in banking and financial system. The central bank said in a statement that it is issuing the repo for seven days starting from September 23. The repo will mature on September 30.    
NRB issues short-term repo if there is liquidity crunch in the banking system. Commercial banks, development banks and financial institutions can buy the repo through tender bids. Before this, NRB had provided the money through repo of Rs 20 billion for a period of seven days on September 2, as well as Rs 30 billion for a period of 14 days on September 9 and Rs 20 billion for a period of one week on September 16.    
Banks and financial institutions use the repo, inter-bank lending and the Standing Liquidity Facility (SLF) in case of liquidity crunch. It is found that banks and financial institutions are not getting the inter-bank lending due to the shortage of liquidity. They have been regularly taking SLF.    
NRB data shows that the banks and financial institutions have raised Rs 409.56 billion through SLF as of Wednesday (September 22) in the current fiscal year starting mid-July.    
BFIs raised Rs 27.24 billion through SLF for 12 times on Wednesday alone, as per the NRB data. -- RSS