Moderate growth seen in deposits, private sector credit

By A Staff Reporter,Kathmandu, July 11: The banks and financial institutions of the country witnessed moderate growth in deposits mobilisation and private sector lending during the first 11 months of the current fiscal year.

Deposits mobilisation at Banks and Financial Institutions (BFIs) increased by Rs. 517.60 billion (8 per cent) in the review period compared to an increase of Rs. 514.57 billion (9 per cent) in the corresponding period of the previous year, according to the macroeconomic and financial situation report made public by the Nepal Rastra Bank recently.

On y-o-y basis, deposits at BFIs expanded by 12 per cent in mid-June 2025. The share of demand, saving and fixed deposits in total deposits stood at 5.7 per cent, 36.2 per cent and 50.2 per cent respectively in mid-June 2025. 

Such shares were 5.2 per cent, 29.1 per cent and 58.5 per cent respectively a year ago. The share of institutional deposits in total deposit of BFIs stood at 35.5 per cent in mid-June 2025. Such a share was 36 per cent a year ago.

Similarly, private sector credit from BFIs increased by Rs. 407.62 billion (8 per cent) in the review period compared to an increase of Rs. 246.80 billion (5.1 per cent) in the corresponding period of previous year. 

On y-o-y basis, credit to the private sector from BFIs increased by 8.7 per cent in mid-June 2025.

The shares of private sector credit from BFIs to non-financial corporation and household stood at 63 per cent and 37 per cent respectively in mid-June 2025. Such shares were 63.5 per cent and 36.5 per cent a year ago.

In the review period, private sector credit from commercial banks, development banks and finance companies increased by 8.4 per cent, 4.7 per cent and 6.9 per cent respectively.

Out of the total outstanding credit of the BFIs as of mid-June 2025, 14.5 per cent is against the collateral of current assets (such as agricultural and non-agricultural products) and 65 per cent against land and building. 

In the review period, outstanding loan of BFIs to the industrial production sector increased by 8.2 per cent, construction sector by 12.9 per cent, wholesale and retail sector by 5.2 per cent, transportation, communication and public sector by 13.5 per cent, service industry sector by 8.8 per cent and consumable sector by 10.9 per cent.

In the review period, term loan extended by BFIs increased by 5.1 per cent, margin nature loan by 42.8, trust receipt (import) loan by 62.2 per cent, hire purchase loan by 5.5 per cent, cash credit loan by 0.6 per cent and real estate loan (including residential personal home loan) increased by 5 per cent. 

However, the overdraft loan extended by FBIs decreased by 13.2 per cent during the review period.