Kathmandu. Banks are finding it increasingly difficult to manage liquidity. Banks have been availing billions of liquidity facility from Rashtra Bank in one day. Commercial banks on Tuesday provided a loan of Rs 43.80 billion in Standing Liquidity Facility (SLF). As the liquidity crunch among the banks is getting worse, 24 commercial banks have availed the Central Bank's Permanent Liquidity Facility (SLF). 

Banks have been withdrawing SLF from NRB on the basis of their government securities. NRB has been giving SLF to banks for one year to meet short-term liquidity. This is only a short term facility for banks. If the bank lacks immediate liquidity, they will be able to avail this facility. Its interest rate is very high.

Banks can borrow from the central bank at any time to manage their unforeseen liquidity crisis by pledging government bonds or government-issued bonds. NRB adds a panel rate of 3 percent to the average fund discount rate of the last treasury bill or whichever is higher. And, the borrowing bank determines the interest to be paid to the central bank.

The interbank interest rate has also risen to around 7 percent recently due to lack of liquidity in banks. The interbank interest rate reached 6.99 percent on Tuesday alone. According to NRB, Laxmi and NMB banks have provided interbank loans while other banks have availed the facility.