KATHMANDU: Banks and other financial institutions (BFIs) in Nepal are dealing with a substantial build-up of loanable funds totaling Rs 793 billion. Their incapacity to provide loans as planned—mainly because of the market's low demand for credit—has led to this excess. The spokesman for Nepal Rastra Bank (NRB), Gunakar Bhatta, emphasized that banks are finding it difficult to lend enough money, even with appropriate capital.
As of the first 11 months of the current fiscal year, the real rise in private sector lending, despite the NRB's efforts through monetary policy, stands at just 4.7%. The credit-deposit ratio has decreased as a result of this disparity, and it currently stands at 79.18%, much below the NRB's 90% threshold.
6.335 trillion in deposits have been received by BFIs, according to NRB figures, while 5.149 trillion in loans have been issued by them. The surplus of money available for lending was further increased by BFIs, who collected an extra Rs 69 billion in deposits in only the last week alone.
