Kathmandu. Although the rate of deposit collection in Nepal’s banking system has been aggressive in recent times, its mobilization has been very slow. Banks have come up with various schemes for investment. However, loans have not been able to grow at the expected pace. <\/p>\n
According to the latest data of the Nepal Rastra Bank, the total deposits of commercial banks have reached Rs 72.61 trillion. This figure shows an increase of Rs 64.40 billion compared to the previous month. On an annual basis, the growth rate of deposits is 15.92 percent. This is a jump of Rs 997.91 billion compared to the previous year. However, this trend of depositing money in banks has added more liquidity burden to the banking system instead of making the economy dynamic. <\/p>\n
The change in the structure of deposits also illustrates the psychology of the market. According to the data, the share of fixed deposits has shrunk while savings and call deposits have increased significantly. Fixed deposits have declined from Rs 2735.62 billion to Rs 2694.47 billion in a month. In contrast, savings deposits have reached Rs 33.38 trillion and call deposits have reached Rs 6.254 trillion. The fact that depositors prefer to keep their money in a liquid state rather than ‘lock’ it for a long period of time indicates that there is still a solid investment opportunity and lack of confidence in the market. <\/p>\n
From the point of view of financial health, the total capital fund of the banks has reached Rs 752.48 billion, but the challenges in internal management remain. The capital fund increased by 0.20 percent in the month and the annual growth was about Rs 64.73 billion. However, the fact that the ‘accumulated income’ within the capital fund is still negative at Rs 25.51 billion highlights the real profitability of the banks and the pressure of bad debt management. Although the total assets and liabilities of the banks have reached Rs 9.082 trillion, the accumulated losses seem to be curbing the dividend capacity. <\/p>\n
Although the profit of the banks has improved by 15.15 percent compared to the previous month, the long-term growth has been sluggish. As of mid-June 2026, the profit account of the banks stood at Rs 55.24 billion, which is a slight increase of 2.14 percent compared to the same period last year. This confirms that the margin of ‘interest income’, which is the main source of the banking business, is shrinking and the burden of operating expenses is increasing. The increase in profit to 2 percent while the size of assets increased by 12.5 percent shows that banks are focusing only on quantity rather than quality of business. <\/p>\n
The most striking situation is in the relationship between interest rates and credit flows. The average base rate of banks and the average lending rate have fallen to a historic low of 6.64 per cent due to excess liquidity in the market. Theoretically, the demand for credit should increase sharply when interest rates come down. However, credit growth to the private sector is limited to only 6.5 per cent. The fact that deposits grew by 15 per cent and loans stopped at 6.5 per cent means that entrepreneurs are still in a wait-and-watch situation for new investments. <\/p>\n
On the one hand, the pile of deposits is increasing the cost and on the other hand, the loan has not been sold even after offering cheap interest rates. The fall in the base rate of the banks below 5 percent and the lack of credit flow has made it clear that monetary instruments alone cannot keep the economy moving. <\/p>\n
The challenge now seems to be to focus on how to take this huge capital in the bank to the productive sector and how to improve the deteriorating morale of the investors. Experts say that the need of the hour is for the government to work by taking the private sector into confidence. They say that increasing investment in infrastructure will mobilize liquidity and it will provide long-term benefits.<\/p>\n","protected":false},"excerpt":{"rendered":"
Kathmandu. Although the rate of deposit collection in Nepal’s banking system has been aggressive in recent times, its mobilization has been very slow. Banks have come up with various schemes for investment. However, loans have not been able to grow at the expected pace. According to the latest data of the Nepal Rastra Bank, the […]<\/p>\n","protected":false},"author":9,"featured_media":296962,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[45117,45031,45159],"tags":[],"class_list":["post-313094","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bank-finance-en","category-banner-news-en","category-news-en"],"acf":[],"_links":{"self":[{"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/posts\/313094","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/comments?post=313094"}],"version-history":[{"count":1,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/posts\/313094\/revisions"}],"predecessor-version":[{"id":313095,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/posts\/313094\/revisions\/313095"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/media\/296962"}],"wp:attachment":[{"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/media?parent=313094"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/categories?post=313094"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/tags?post=313094"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}