Nepal’s banking sector shows resilience with growing deposits and digital reach

KATHMANDU: Nepal’s banking and financial landscape has shown steady growth and increasing public trust, according to the latest figures released by the country’s central bank. The Nepal Rastra Bank (NRB) recently published its monthly “Banking and Financial Statistics” report for Mangshir 2082, which corresponds to mid-December 2025.

The data reveals that the total amount of money held in bank deposits and the credit extended to the public have both reached new heights, reflecting a stable financial environment.

By mid-December 2025, total deposits in the banking system climbed to Rs 7,578.8 billion. This is a notable increase from the Rs 7,520.2 billion recorded just a month earlier, marking a growth of 0.78%. Interestingly, the way people are saving is shifting. While savings accounts saw a healthy boost of 2.66%, reaching Rs 3,015.2 billion, fixed deposits experienced a slight decline of 1.50%, settling at Rs 3,359.7 billion. This suggest that many customers may prefer to keep their money in more flexible accounts rather than locking it away for long periods.

Lending activity also remained strong during this period. Total credit provided by banks and financial institutions rose to Rs 5,676.3 billion. A massive chunk of this lending—roughly Rs 5,454.8 billion—was directed toward the private sector, supporting businesses, farmers, and individual homeowners across the nation.

The Credit to Deposit (CD) ratio, which is a key measure of how much of their total deposits banks are using for loans, stood at 74.12%. This level indicates that banks have a comfortable amount of money available to meet any further demands for loans or withdrawals.

The report also sheds light on the overall health of the banking sector. The non-performing loan (NPL) ratio, which tracks loans that are not being repaid on time, averaged 5.26% across all institutions.

However, there is a clear difference between types of banks; while commercial banks maintained a lower NPL of 5.03%, finance companies saw a much higher rate of 12.52%, indicating some financial stress in that sector. Despite this, the capital adequacy ratio for the industry remains solid at 12.82%, which is well above the required safety limits.

Interest rates have also stayed relatively stable for consumers. On average, people earned about 3.66% on their bank deposits. Specifically, savings accounts offered about 2.97%, while those with fixed deposits enjoyed a higher average return of 5.32%. For those looking to take out a loan, the weighted average interest rate was 7.26%.

Beyond the numbers, the reach of the banking system is expanding rapidly. There are now 106 licensed financial institutions operating in Nepal, including 20 commercial banks and 51 micro-finance companies. Together, they operate 6,527 branches and 5,274 ATMs throughout the country.

Digital banking has become a way of life for many, with mobile banking customers reaching nearly 28.9 million. With over 61 million deposit accounts now active, it is clear that more Nepalis than ever before are connected to the formal financial system, providing a strong foundation for future economic growth.