Glimmer of Hope

Bank lending ticks up Rs 16 billion in a week as businesses reopen

Published On: December 1, 2020 03:55 PM NPT By: Republica  | @RepublicaNepal

Loan disbursement growth still tepid, say bankers   

KATHMANDU, Dec 1: Banks lending has gone up by Rs 16 billion in one week while their deposits rose by Rs 19 billion.

According to Nepal Bankers’ Association (NBA), the total loans that 27 commercial banks floated increased to Rs 3,066 billion on November 27 from Rs 3,050 billion on November 20. In the same period, their deposits surged to Rs 3,675 billion from Rs 3,656 billion.  

In the previous week, the bank lending had gone down by Rs 2 billion while deposits rose by Rs 8 billion.

Bank loans have started to rise in recent days as businesses shut for months due to lockdowns and risk of coronavirus outbreak have started resuming their operation.

While economic activities have started to pick up in recent months, many businesses and factories are yet to operate in their full capacity. Some sectors including tourism and leisure are yet to reopen as the risk of coronavirus infections continues to rise.

Bankers, however, say that loan disbursements are still tepid and have not taken the pace of deposit growth. The sluggish lending combined with continuous growth of deposits has driven down interest rates in recent months.

Interest rates of banks on both loans and deposits have plunged to one of the lowest levels.

The slowdown in their investments has been hitting their profits in recent quarters.

Net profit of almost all banks has taken a dive in the first quarter of the current fiscal year 2020/21 compared to the same period of the last fiscal year 2019/20, according to their unaudited financial results.


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