Bank deposits up by 8.8%

Kathmandu / July 12: The deposit mobilisation at banks and financial institutions (BFIs) has increased during the current fiscal year.

Deposits at banks and financial institutions (BFIs) increased by 8.8 per cent to Rs. 445.13 billion in the review period compared to an increase of 5.7 per cent (Rs. 266 billion) in the corresponding period of the previous year.

According to a current macroeconomic and financial report of NRB released on Monday, on y-o y basis, deposits at BFIs expanded by 12.2 per cent in mid-June 2023.

The share of demand, saving and fixed deposits in total deposits stood at 7.9 per cent, 25.6 per cent and 59.8 per cent respectively in mid-June 2023.

Such shares were 8.8 per cent, 27.1 per cent and 57.1 per cent respectively a year ago.

The share of institutional deposits in total deposits of BFIs stood at 36.7 per cent in mid-June 2023. Such a share was 38.6 per cent in mid-June 2022.

However, the rate of private sector credit from BFIs has decreased during the review period as compared to same period last fiscal year.

Private sector credit from BFIs increased by Rs. 157.36 billion (3.4 per cent) in the review period compared to an increase of Rs. 552.71 billion (13.5 per cent) in the corresponding period of previous year. On y-o-y basis, credit to the private sector from BFIs increased by 3 per cent in mid-June 2023.

The shares of private sector credit from BFIs to non-financial corporation and household stand at 62.6 per cent and 37.4 per cent respectively in mid-June 2023.

Such shares were 63.3 per cent and 36.7 per cent a year ago.

In the review period, private sector credit from commercial banks, development banks and finance companies increased 3.2 per cent, 6.0 per cent and 0.9 per cent respectively.

In the review period, out of the total outstanding credit of the BFIs, 11.6 per cent is against the collateral of current assets (such as agricultural and non-agricultural products) and 68 per cent against land and building.

Such ratios were 12.3 per cent and 66.8 per cent respectively a year ago.

In the review period, outstanding loan of BFIs to the agricultural sector increased by 6.6 per cent, industrial production sector by 8.4 per cent, construction sector by 7.6 per cent, transportation, communication and public sector by 16.7 per cent, wholesale and retail trade sector by 4 per cent, service industry sector by 3.3 per cent and consumable sector by 6.7 per cent.

In the review period, term loan extended by BFIs increased by 23.4 per cent, real estate loan (including residential personal home loan) by 5.2 per cent and trust receipt (import) loan by 7.3 per cent whereas overdraft loan decreased by 67.6 per cent (mainly due to reclassification of loan from the recent year).

However, margin nature loan has decreased by 7.2 per cent and hire purchase loan by 13 per cent during the review period.