Kathmandu. Although the country’s economic indicators are improving, the demand for credit from the private sector has not increased much. Although the share mortgage loan from banks has increased significantly, the demand for real estate and vehicle loans has been slow.
Nepal Rastra Bank (NRB) has released this data for the 11 months of the current fiscal year. With more liquidity accumulating in the banking system, the central bank is constantly pulling money from the banking system using deposit collection tools. Banks are also being forced to keep money in the Rastra Bank at cheaper interest rates.
Banks are focusing more on recovery of bad loans. They are also trying to raise bad loans rather than new loans to make the annual financial statements of the current financial year strong. For this reason, the flow of credit seems to have not picked up pace.
According to the data, rs 277.71 billion has been borrowed from banks in real estate till May. Which is an increase of 3.6 percent compared to mid-June last year. As of Mid-July last year, the banks had disbursed loans worth Rs 268.12 billion to real estate.
Similarly, the demand for residential personal home loans has increased by 6 percent till May. Banks have disbursed loans worth Rs 410.68 billion till mid-June from Rs 387.16 billion till mid-June.
According to nrb’s provisions, banks can provide residential personal home loans up to a maximum of Rs 20 million.
According to the data, in the 11 months of the current fiscal year, rs 130.94 billion has been loaned by the banks. Car loans have increased by 5.5 percent compared to mid-June of the previous fiscal year. A total of Rs 124.10 billion was disbursed as vehicle loans till mid-July last year.
During the review period, rs 88.79 billion has been provided by banks for commercial purposes. As of June 2018, rs 87.26 billion had been disbursed from banks for commercial purposes. Loans under this head increased by 1.8 percent in the review period compared to June.
The bank has disbursed Rs 42.15 billion in vehicle loans for personal purposes till May of the current fiscal year. Which is an increase of 14.4 percent compared to last June. As of Last June, the bank had disbursed Rs 36.84 billion in vehicle loans.
