BFIs demand Refinance Facility of Rs. 56 billion

Ajay Chhetri / Kathmandu, Dec. 14: Amid dwindling deposits, Bank and Financial Institutions have demanded a refinance facility.

According to the Nepal Rastra Bank (NRB), BFIs have demanded Rs. 56 billion as a refinancing facility.

BFIs have resorted to a refinancing facility in the wake of rising loan demand against the shrinking deposit.

The lending fund went up by Rs. 36 billion in contrast to the slid in the deposit by Rs. 5 billion in a span of over a month, from November 19 and December 10.

According to the Nepal Bankers Association (NBA), commercial banks lent Rs. 4,077 billion up until December 10 from Rs. 4,041 billion of November 19. In contrast, the deposit slid to Rs. 4,221 billion on December 10 from the previous deposit of Rs. 4,226 billion on November 10.

Spokesperson of NRB, Narayan Prasad Pokhrel, said that the demand for the refinancing facility of Rs 56 billion is submitted to the NRB. He said that the central bank will assess the extent of the need of the demand and provide facilities accordingly.

As the economy rebounded in the current fiscal year (FY), the demand for the loan rose. According to the follow-up report of mid-December, the business activities rebounded by approximately 74.7 per cent in the end of mid-December 2021 in comparison to mid-December 2020.