Deposits collection, loan disbursement up in BFIs

By A Staff Reporter,Kathmandu, Aug. 20: The deposit collection at Banks and Financial Institutions (BFIs) increased by 13 per cent during the last fiscal year 2023/24.

According to an annual current macroeconomic and financial situation report for the fiscal year 2023/24 made public by the Nepal Rastra Bank (NRB) on Sunday, deposit collection increased to Rs. 742.37 billion (13 per cent) during the last fiscal year as compared to an increase of Rs. 627.25 billion (12.3 per cent) in the previous year.

The share of demand, savings, and fixed deposits in total deposits stood at 5.8 per cent, 30.3 per cent and 56.4 per cent respectively in mid-July 2024. 

Such shares were 7.7 per cent, 26.6 per cent and 58.9 per cent respectively a year ago.

The share of institutional deposits in total deposit of BFIs stands at 36.2 percent in mid-July 2024. Such a share was 36.6 per cent in mid-July 2023.

Similarly, private sector credit from BFIs increased to Rs. 276.94 billion (5.8 per cent) in the review year compared to an increase of Rs. 175.94 billion (3.8 per cent) in the previous year.

The shares of private sector credit from BFIs to non-financial corporation and household stood at 63.3 per cent and 36.7 per cent respectively in mid-July 2024, according to the NRB. 

Such shares were 62.7 per cent and 37.3 per cent a year ago.

In the review year, private sector credit from commercial banks, development banks and finance companies increased by 5.8 per cent, 5 per cent and 7.7 per cent respectively.

In the review year, out of the total outstanding credit of the BFIs, 66.5 per cent is against the collateral of land and buildings and 13.2 per cent against the collateral of current assets (such as agricultural and non-agricultural products). 

Such ratios were 68 per cent and 11.6 per cent respectively a year ago.

Outstanding loan of BFIs to the agriculture sector increased by 0.9 per cent, industrial production sector by 8.8 per cent, transportation, communication and public sector by 16.7 per cent, wholesale and retail sector by 1.5 per cent and service industry sector by 6.2 per cent in the review year.

In the review year, term loan extended by BFIs increased by 22.2 per cent, real estate loan (including residential personal home loan) by 9.6 per cent, and margin nature loan by 18.1 per cent. 

Similarly, the trust receipt (import) loan extending by BFIs increased by 12.6 per cent while that of hire purchase loan decreased by 22 per cent, overdraft by 46.3 per cent, demand and working capital loan by 17.6 per cent.