Deposit Declines In BFIs: Nepal Rastra Bank

Deposit Declines In BFIs: Nepal Rastra Bank

Dec. 18, 2022, 8:06 a.m.

The growth rate of deposit mobilization at Banks and Financial Institutions has decreased during the first four months of the current fiscal year 2022/23.

Deposit mobilisation at Banks and Financial Institutions (BFIs) increased by Rs. 46.74 billion (0.9 per cent) during the first four months of the current fiscal year compared to an increase of Rs. 62.42 billion (1.3 per cent) in the corresponding period of the previous year.

On y-o-y basis, deposits in BFIs expanded 8.6 per cent in mid-November 2022, according to a current macroeconomic and financial report of four months of the current fiscal year recently published by the Nepal Rastra Bank (NRB).

The share of demand, savings, and fixed deposits in total deposits stood at 7.4 per cent, 26.0 per cent and 58.0 per cent respectively in mid-November 2022. Such shares were 7.1 per cent, 33.1 per cent and 52.3 per cent respectively a year ago.

The share of institutional deposits in total deposit of BFIs stood at 37.1 per cent in mid-November 2022. Such a share was 39.8 per cent in mid-November 2021.

Private sector credit from BFIs increased by Rs. 68.55 billion (1.5 per cent) in the review period compared to an increase of Rs. 364.62 billion (8.9 per cent) in the corresponding period of the previous year.

On y-o-y basis, credit to the private sector from BFIs increased by 5.4 per cent in mid-November 2022.

The shares of private sector credit from BFIs to non-financial corporation and household stood at 64 per cent and 36 per cent respectively in mid-November 2022.

In the review period, private sector credit from commercial banks, development banks and finance companies increased by 1.3 per cent, 3.4 per cent and 0.1 per cent respectively.

In the review period, out of the total outstanding credit of the BFIs, 66.8 per cent was against the collateral of land and building and 12.3 per cent against the collateral of current assets (such as agricultural and non-agricultural products).

Outstanding loan of BFIs to industrial production sector credit increased by 6.8 per cent, service industry sector by 3.8 per cent, transportation, communication and public sector by 2.9 per cent, construction sector by 2.5 per cent, agriculture sector by 2.4 per cent and wholesale and retail sector by 2.1 per cent during the review period.

In the review period, term loan extended by BFIs increased by 4.9 per cent, overdraft by 9.7 per cent, trust receipt (import) loan by 4.6 per cent, demand and working capital loan by 3.6 per cent, real estate loan (including residential personal home loan) by 2.8 per cent whereas hire purchase loan and margin loan decreased by 3.3 per cent and 5.6 per cent respectively.

Source: TRN

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