Bank deposit grows, credit falls

By A Staff Reporter,Kathmandu, Aug. 20: The deposit mobilisation at Banks and Financial Institutions (BFIs) increased in the last fiscal year 2022/23 as compared to previous fiscal year 2021/22.

The deposit mobilisation increased by 12.3 per cent in the review year compared to a growth of 9 per cent in the previous year, according to an annual current macroeconomic and financial report published by NRB, Friday.

The share of demand, saving and fixed deposits in total deposits stood at 7.7 per cent, 26.6 per cent and 58.9 per cent respectively in mid-July 2023. 

Such shares were 8.9 per cent, 27.6 per cent and 55.8 per cent respectively a year ago. The share of institutional deposits in total deposit of BFIs stood at 36.6 per cent in mid-July 2023. Such a share was 38.3 per cent in mid-July 2022.

However, the rate of private sector credit from BFIs decreased during last fiscal year as compared to previous fiscal year. 

Private sector credit from BFIs increased only by 3.8 per cent in the review year compared to a growth of 13.1 per cent in the previous year.

The shares of private sector credit from BFIs to non-financial corporations and households stood at 62.7 per cent and 37.3 per cent respectively in mid-July 2023. 

In the review year, private sector credit from commercial banks, development banks and finance companies increased by 3.5 per cent, 7.6 per cent and 0.6 per cent respectively.

Outstanding loan of BFIs to the agriculture sector increased by 6.8 per cent, industrial production sector by 8.3 per cent, transportation, communication and public sector by 21.0 per cent, wholesale and retail sector by 3.9 per cent and service industry sector by 3.7 per cent in the review year.

In the review year, term loan extended by BFIs increased by 32 per cent, real estate loan (including residential personal home loan) by 5.6 per cent and hire purchase loan by 1.3 per cent.

However, trust receipt (import) loan extended by BFIs decreased by 6.2 per cent, overdraft 67.7 per cent, demand and working capital loan by 13.2 per cent and margin nature loan by 5.2 per cent.