Deposits rise 8 pc as private sector credit grows 8.7 pc in 11 months of FY 2024/25: NRB

KATHMANDU: Deposits at banks and financial institutions (BFIs) rose by Rs 517.60 billion, or 8.0%, in the first 11 months of current fiscal year 2024/25, compared with an increase of Rs 514.57 billion, or 9.0%, in the same period a year earlier, the latest macroeconomic and financial situation report issued by Nepal Rastra Bank today shows. 

On a year-on-year basis, total deposits expanded by 12.0% in mid-June 2025.

In mid-June 2025, demand deposits accounted for 5.7% of total deposits, savings deposits for 36.2% and fixed deposits for 50.2%, compared with 5.2%, 29.1% and 58.5% respectively a year earlier. Institutional deposits comprised 35.5% of the total, down from 36.0% a year ago.

Private sector credit extended by BFIs increased by Rs 407.62 billion (8.0%) over the review period, up from Rs 246.80 billion (5.1%) a year earlier. On a year-on-year basis, private sector credit grew by 8.7% in mid-June 2025. Of the total, 63.0% went to non-financial corporations and 37.0% to households, compared with 63.5% and 36.5% a year earlier.

By institution, credit from commercial banks rose by 8.4%, from development banks by 4.7% and from finance companies by 6.9%. Secured lending against current assets accounted for 14.5% of outstanding BFI credit, and against land and buildings 65.0%, compared with 12.0% and 68.5% a year earlier. Sectoral lending increases included 8.2% to industrial production, 12.9% to construction, 5.2% to wholesale and retail trade, 13.5% to transport, communications and public services, 8.8% to services and 10.9% to consumables.

Term loans increased by 5.1%, margin-nature loans by 42.8%, trust-receipt (import) loans by 62.2%, hire-purchase loans by 5.5%, cash-credit loans by 0.6% and real-estate (including residential home) loans by 5.0%, while overdraft loans fell by 13.2%.

In liquidity operations, the NRB absorbed a net Rs 21,343.5 billion via monetary instruments: Rs 2,784.8 billion through deposit-collection auctions and Rs 18,558.7 billion through the Standing Deposit Facility, while Rs 2.7 billion was utilised under the Overnight Liquidity Facility. In the same 11 months of the previous year, the bank absorbed a net Rs 1,900.84 billion.

The central bank also injected Rs 673.25 billion by net purchase of $5.01 billion in the foreign exchange market, against Rs 708.87 billion via $5.33 billion a year earlier. It sold $ 3.46 billion to acquire Indian rupees equivalent to Rs 471.39 billion, compared with $3.64 billion for Rs 484.44 billion in the prior period.

Inter-bank transactions among BFIs amounted to Rs 1,681.54 billion on a turnover basis, including Rs 1,531.21 billion among commercial banks and Rs 150.33 billion among other financial institutions. In the corresponding period a year earlier the total was Rs 4,060.98 billion, with Rs 3,701.43 billion among commercial banks and Rs 359.55 billion among others.

The weighted average yield on 91-day treasury bills was 2.94% in the 11th month of 2024/25, down from 2.99% a year earlier. The weighted average inter-bank rate rose to 2.99% from 2.95%.

Average base lending rates in the eleventh month were 6.09% for commercial banks, 8.29% for development banks and 9.02% for finance companies, versus 8.17%, 9.96% and 11.46% a year earlier. Corresponding weighted average deposit rates were 4.29%, 5.02% and 6.09%, down from 6.17%, 7.07% and 8.28%. The weighted average lending rate stood at 7.99% for commercial banks, 9.40% for development banks and 10.22% for finance companies, compared with 10.15%, 11.63% and 12.85% respectively.