Deposit growth picks up in first four months of FY 2025/26

By A Staff Reporter,Kathmandu, Dec. 21: Deposit mobilisation at Banks and Financial Institutions (BFIs) recorded a marginal improvement during the first four months of the current fiscal year 2025/26, while credit expansion to the private sector slowed compared to the same period last year.

According to the latest report published by Nepal Rastra Bank (NRB), deposits at BFIs increased by 3.1 per cent, equivalent to Rs. 222.38 billion, reaching Rs. 7,486.25 billion in the review period. 

In the corresponding period of the previous fiscal year, deposits had risen by 2.3 per cent or Rs. 149.84 billion.  On a year-on-year basis, total deposits expanded by 13.4 per cent by mid-November 2025.

The share of demand, saving and fixed deposits in total deposits stood at 6 per cent, 39.2 per cent and 45.6 per cent respectively in mid-November 2025. 

Such shares were 5.3 per cent, 32.8 per cent and 54.5 per cent respectively a year ago.

The share of institutional deposits in total deposit of BFIs stood at 35.5 per cent in mid-November 2025. Such a share was 35.8 per cent a year ago. Meanwhile, private sector credit from BFIs grew by 1.2 per cent, or Rs. 65.04 billion, reaching Rs. 5,562.75 billion during the review period. 

This was significantly lower than the 2.5 per cent growth, or Rs. 128.47 billion, recorded in the corresponding period of the previous year. 

On a year-on-year basis, private sector credit expanded by 6.9 per cent as of mid-November 2025.

The shares of private sector credit from the BFIs to non-financial corporations and households stood at 62.6 per cent and 37.4 per cent respectively in mid-November 2025. 

Such shares were 64.1 per cent and 35.9 per cent a year ago.

In the review period, private sector credit from both commercial banks and finance companies increased by 1.3 per cent each while private sector credit from development banks decreased by 0.1 per cent.

Out of the total outstanding credit of the BFIs as of mid-November 2025, 15 per cent is against the collateral of current assets (such as agricultural and non-agricultural products) and 64.4 per cent against land and building. 

Such ratios were 13.5 per cent and 66 per cent respectively a year ago.

In the review period, outstanding loan of BFIs to construction sector increased by 3.2 per cent, transportation, communication and public sector by 2.9 per cent, industrial production sector by 1.9 per cent, consumable sector by 1.7 per cent, wholesale and retail sector by 0.4 and service industry sector by 0.1 per cent.

However, the outstanding loan of BFIs to agriculture sector decreased by 2.6 per cent and finance, insurance and fixed assets sector by 2.5 per cent in the review period.

In the review period, margin nature loan extended by BFIs increased by 3.9 per cent, real estate loan (including residential personal home loan) by 3.4 per cent, cash credit loan by 1.8 per cent, hire purchase loan by 1.3 per cent, demand and other working capital loan by 1.1 per cent and term loan by 0.9 per cent. 

However, overdraft loan and trust receipt (import) loan decreased by 4.9 per cent and 2.1 per cent respectively.