Kathmandu. Due to lack of speed in credit flow, money has been piled up in banks.
Banks are under pressure as they are unable to recover bad loans. They are now focused on recovering loans. Although the interest rate on loans is around a single point, the demand for loans in banks has not increased due to the lack of improvement in the economy.
Although the share mortgage loan has increased in recent times, the demand for loans from other sectors has not been much. As a result, deposits are piling up in banks and financial institutions.
According to the latest data of Nepal Rastra Bank, the total deposits of banks and financial institutions have reached Rs 6,897 billion. This is the data of May 15.
On the other hand, the total loan investment of banks and financial institutions stood at Rs 5,531 billion as on May 15. Around 80 percent of the total deposits of banks and financial institutions have been invested.
According to the provisions of the Rastra Bank, banks and financial institutions can invest up to 90 percent of the total deposit. In this way, 10 percent of the investible liquidity is still in the bank.
The central bank has been continuously drawing money from the banking system using deposit collection tools. Current fiscal year 2081. The central bank has used this tool to attract liquidity from banks 76 times, including today.
Newly appointed Governor Bishwanath Poudel has pledged to bring an appropriate policy to speed up the flow of credit. The monetary review for the third quarter of the current fiscal year is coming this week. Bankers are hopeful that some policy will come to ease the pressure on the banking sector through the review.
