Nepal’s banking system witnessed a sudden rise in deposits while credit growth stayed almost flat. According to Nepal Rastra Bank data, deposits increased by Rs 17 billion in a single day.
Deposits rising faster than loans
By Monday, deposits had reached Rs 7.306 trillion, which climbed to Rs 7.323 trillion by Tuesday. During the same period, loans only grew by Rs 2 billion, moving from Rs 5.625 trillion to Rs 5.627 trillion.
Commercial banks’ position
Commercial banks alone now hold Rs 6.573 trillion in deposits and have floated Rs 5.004 trillion in loans.
CD ratio and interest rate easing
With deposits piling up faster than lending, the average credit-to-deposit (CD) ratio has slipped to 75.89% from the earlier 76.04%. This shows banks have more liquidity at hand. Interbank interest rate currently stands at 2.75%, reflecting the comfortable liquidity situation.
More deposits and limited loan demand are keeping the CD ratio under pressure. For banks, this means room to lend more, but for the economy, it shows investment and borrowing are still not picking up speed.
