Bank deposits started increasing as festive knock the door, Rs 67 billion was added in two weeks

KATHMANDU: Bank deposits, which have been continuously decreasing since the beginning of the current fiscal year, have started increasing in the last few weeks. In this process, in the last week only Rs 26 billion of deposits have been added in commercial banks.
In the previous week, deposits of commercial banks increased to Rs 41 billion. According to the data of the Bankers’ Association, only Rs 67 billion have been deposited in commercial banks in the last two weeks.

On the occasion of Dasain and Tihar, the great festivals of Hindus, Nepalis abroad have increased the number of remittances, government spending on salaries and allowances of employees, Dasain bonus, etc. has increased in recent weeks, experts say.

According to Nepal Rastra Bank, as of last Friday, only Rs 45.12 billion of deposits have been collected in commercial banks. On August 31, such deposits of commercial banks were Rs 44.86 billion.

In recent weeks, deposits have increased as expected, but credit disbursement has not improved as expected. Most of the banks and financial institutions have stopped disbursement of loans as the liquidity problem has not been solved for a long time. Experts say that this is the reason why credit expansion is less.

According to the data of the central bank, the total credit disbursement of commercial banks is Rs 41.94 billion as of last Friday. A week ago (last August 31st), the total loan disbursement of those banks was Rs 41.90 billion.

Similarly, the average credit to deposit ratio (CD ratio) of commercial banks is 87.21 percent as of last Friday. Banks and financial institutions should maintain a maximum CD ratio of 90 percent as per the instructions of the central bank.