Dikson Limbu

Dikson Limbu

Limbu is an MBA graduate from Kathmandu University School of Management

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Excess Liquidity and Mounting Defaults: Nepal’s Banking Sector Faces Looming Crisis

Excess Liquidity and Mounting Defaults: Nepal’s Banking Sect...

Nepal's banking sector is experiencing an alarming paradox. While banks are flush with liquidity, as seen by a Credit-to-Deposit Ratio (CDR) of 78.58% as of December 7, 2024 (source: Nepal Rastra Bank), they are also grappling with an unprecedented increase in loan defaults.

Nepal's banking sector is experiencing an alarming paradox. While banks are flush with liquidity, as seen by a Credit-to-Deposit Ratio (CDR) of 78.58% as of December 7, 2024 (source: Nepal Rastra Bank), they are also grappling with an unprecedented increase in loan defaults.

The Cost of Remittances

The Cost of Remittances

The unproductive use of remittances, combined with inflation in health, education, and consumer goods, and the possibility of a real estate bubble burst, could have severe repercussions for Nepal's economic future in the long run.

The unproductive use of remittances, combined with inflation in health, education, and consumer goods, and the possibility of a real estate bubble burst, could have severe repercussions for Nepal's economic future in the long run.